I hate to resurrect a post this old and with so much slander in it but I think there was something missed here. Early on in the thread he mentioned having the TB cleaned due to hard starting. That makes me wonder if the air assisted injectors have junk in them causing them to be no longer efficient. I drive my 98 es like I stole it mostly in the city and I still get around 17 or so mpg average, But my entire intake and air assist system are spotless because I removed and cleaned it and I will never use a K&N filter, as they are junk and let a ton of crap into your engine.
All diagnostic wisdom is earned only from experience and study of other peoples wisdom. That is why I love CL. I get to learn and teach.
Just an idea, has anybody considered dragging brakes? My MPG dropped suddenly after the winter season and I couldn't figure out why. Came home one day to smell something hot and it wasn't the engine. Felt the rims and just about burnt myself, I don't want to know how hot the rotors were. Replaced the brakes (the left side caliper was black and the right side rotor was warped, they had gotten so hot) and now I'm getting about 24MPG mixed driving with the AC on. Before I was getting about 19MPG mixed with the AC off.