I'm about out of thoughts on that IAT, I had that thought too about "if I have to drive with
engine light on", yea if I did'nt have any issues,
I'd take the bulb out on that light panel if I had too.......I had too take my bulb out on my '95 because I've got a plugged egr tube and it keep spitting that code out, keeping annoying light on, someday I'll get to that egr tube and put my bulb back in........I mention that because I know what it's like to drive around with that light on............
OK so you've checked more than once on that DTC and it's correct.....just for my thought, and make sure I'm correct(I'm been working on 4.6's for quite a while) your '88 3.8 is a T.B.I. vs. mutiport injection ? so you have the old time round air cleaner with the old time round lid on top ? vs. the new stuff(I call it) were the air cleaner is way over by the fender(my 4.6 and I guess your '95 5.0)..........in short, both 95's should have an air silencer box under air filter box, so if your 3.8 is T.B.I with round filter box, your air intake tube(dual or not?), if you still have the intake tubes would run over to openings in the fender, now here's what I'm getting at, IF this car is using an air silencer box about the only place you could put it on your set-up is in the fender above the tire fender liner, you'd have to take your tire fender liner out to get at it AND that's where your's may be placed if you have one...........That's about all I can think of on that *amn I.A.T..................
Gonna throw in a thought here, on that fuel mileage, if the car is low mileage maybe it does'nt need o2 sensors, but could maybe use a throttle body injector flush, Ford use to call it, now air/fuel injection flush, you also might want to consider BG
fuel system cleaner, what my dealer uses...........you probably know all this, ya sound like a Ford man with T-bird, F-150 and Escort mentioned................
Like I said, if your still searching for that I.A.T. consider checking right on the other side of that fender wall where the intake tube goes.......