I have had a similar problem with my 1997 Taurus 3.0 Vulcan engine, currently at 118K miles. The "Service Engine Soon Light" has been coming on from the P0421 code intermittently for about a year now. I have had it reset, or it will often reset itself on subsequent test cycles. I am going to try swapping the downstream O2 sensors (the V-6 has two cats, and 2 downstream sensors, thus 2 "banks") to see if the problem presists with the other downstream sensor on bank 1, and/or now shows up on bank 2. Because it is intermittent, I suspect that I am having problems with the signal from the downstream O2 sensor, rather than an actual problem wth converter performance. My research on this code indicates that it is very common on vehicles above 75K miles, and in most cases, does NOT correlate with excessive emissions due to a depleted cat conveter. Most vehicles with this code when tested by a tailpipe "sniffer" will pass the applicable emissions limits. However, with emissions programs now using the OBDII code status only as a pass/fail criteria for cars so equipped, that may not matter. I haven't had to test the system yet, as thankfully, the code was not present (it had cleared itself a few days prior) when I had to submit to a Connecticut emissons test in March. My plan was to ask for a tailpipe test to confirm the code if I had to take the test with the code present. Would be interested to know if anyone has ever challeged the system this way , and what the outcome was.
On your 2 liter, don't think you can do the sensor swap diagnostic like I am going to do , as you only have one "bank". But changing the downstream O2 sensor would be a prudent first step financially before committing to a cat replacement. On my 3.0 V-6, a cat replacement would be very expensive, as a "Y pipe", containing 2 converters for both banks must be changed. Nice design for affordability, Ford! Just like the design of making a $20 ball joint as an intergral part of a $300 hub carrier casting, or a $10 wheel bearing an intergral part of a $150 wheel hub cartridge assembly! I'll stop my ranting now....
Chris Bowne Stonington, CT