"When I unpluged it, the car leaned out... almost wanted to stall."

The "leaned out...stall" reaction is not the O2 sensors fault. When the Lambda CU "loses" the O2 sensor signal, it should default to a richer "Duty Cycle" frequency on the Frequency Valve (the part where you damaged the line connection). It should run better, if anything. (Is your line repair holding up OK?)

Your basic mixture may be set too lean at the Fuel Distributor. Don't waste your money on an O2 sensor until you get it running decent with the sensor unplugged.

"Where exactly is the O2 sensor at? I could see the wire going somewhere under the car, but couldn't tell after that."

This question suggests that you and your good old car really need a good service manual. I recommend the Bentley 240 manual. Even though it says it's for '83 - ''93, about the only part that doesn't apply to your '80 is the LH Fuel Injection part. (And who knows? Your next 240 may have LH.)

The O2 sensor is in the front part of the exhaust somewhere. I'm sure you can find it by following the wire.


--
Bruce Young,
'93 940-NA (current)
'80 GLE V8 (Now gone)
'83 Turbo 245
'73 142 (98K)
'71 144 (track modified--and still here)
New 144 from '67 to '78
Used '62 122 from '63 to '67