I currently have a check engine code on my 96 Legacy 2.2 (160K) of reduced catalyst efficiency. I observed that there are two O2 sensors on the catalyst (one at each end), and believe that only the front sensor really controls the engine systems and that the rear O2 sensor is the only means that the computor could possibly detect a catalyst problem, so I plan to replace the rear O2 sensor and reset the CEL. My questions are:

 

(1) Does this seem like it makes sense (rear O2 sensor likely going bad instead of the catalyst going bad), or at least a good first step? The CEL has not stayed on the entire time (it has gone out and back on twice on its own over a period of two months), and didn't go back on for about two weeks after I had reset it once with a scan tool seeming to indicate an intermittent failure instead of a continuous failure. (Same single catalyst code each time).

 

(2) When replacing a sensor, one of the manuals recommends removing the O2 sensor with the exhaust system still hot to take advantage of the looser expansion from the heat, and the factory manual says to use an anti-sieze on the new sensor. I often use some FelPro C5A copper anti-sieze on bolts and spark plugs, but am wary about using solvent-based compounds like this directly on sensors. Is this stuff OK, or are there special compounds to use on O2 sensors?

Most O2 sensors (at least aftermarket ones) come with AntiSeize already on the sensor or a packet to use.