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Ok,
So what should I consider regarding the EGR? When the engine is cold, lots of smoke comes from the leaking gasket at the downpipe/manifold, and the car "chokes", idles really bad. When hot, the exhaust stops leaking, and the idle is good. Could a leaking exhaust cause bad idle when cold?


Yes. If the leak if upstream from the O2 sensor, the readings can be skewed by the extra air coming in.
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Could the leaking exhaust cause the NO level to be high?


Very much so. The redux bed of the catalyst depends on a rich mixture in order to reduce the NOx coming through. If you have an exhaust leak, the O2 levels remain too high for the catalyst to burn off the oxygen it has absorbed, thus no Nox reduction.

1990 Montero RS (In pieces... for now)

KG6VNX