I'm assuming that the CO level you are referring to is % CO. 1% CO is very rich. 4.5% is beyond absurd and is a clear indicator something very blatant is wrong. The last emissions test I performed on my 86 Jetta was 0.00% CO. There's no reason that a properly functioning car should be above about .15%, and if you are above .5% something is most likely wrong. Your abysmal fuel economy (and yes, 20 mpg mostly highway is abysmal, it should be more like 30 mpg) is also a clear indicator you are running rich.
The idle air control valve, and the timing, and distributor, and the blah blah blah don't affect this. What can affect it? Dity fuel injectors, a clogged fuel filter, bad pressure regulator, bad mass airflow sensor (MAF), bad O2 sensor, and bad coolant temp sensors would be the most obvious causes, a bad ground could also be to blame. All of these can be checked, and relatively easily. For example. Put a pressure gauge on the fuel rail and measure fuel pressure with the pump on. It should reach whatever is specified in the manual. Turn off the pump. It should stay there. If you have a pressure gauge which can reference the intake manifold then you can try measuring with the engine running. The O2 sensor can be checked on an oscilloscope. The coolant temp sensor can be checked with a multimeter, as can the MAF most likely (if not an oscilloscope should work). The fuel filter can be just replaced since its cheap and easy enough, if you seriously suspect it (and I would if the fuel pressure is too low, especially when the engine is running).
It sounds like you've been driving around like this for a while, its likely you have destroyed the catalytic converter by doing this. Be prepared for that.
No computer can say you need a new O2 sensor. The computer can say that the output of the O2 sensor is not what it expects. It is then up to an educated person to determine why based on performing additional tests. Bad grounds, or air leaks could cause a properly functioning O2 sensor to have faulty readings as could other scenarios such as a totally busted pressure regulator that puts the pressure up so much that the computer can't adequately lean it to compensate. That last one would have a proper reading but it wouldn't be what the computer expects, and in fact its the pressure regulator that has the problem, not the O2 sensor.
As for a coil. The coil is extremely unlikely to cause a high CO reading. I'm curious how this "mechanic" diagnosed a faulty coil as being to blame for your cars problem, or how you've gone through 3 of them. To me this would be a red flag that he's replacing the wrong part. I have heard rebuilt aftermarket alternators and starters are unreliable, but I am much more suspicious of a bunch of brand new Temic coils being bad.
Thats a very very very bad idea. An oxygen sensor will probably cost $60 ($30 if you get a universal Bosch sensor). The next disaster will almost certainly be a screwed up catalytic converter if you continue to run rich, and you don't want to know how much that will cost. Knowing what is wrong with your car and fixing it is worth something in terms of piece of mind. If I had to guess, all these mechanics you have been taking it to (the one who keeps replacing your coil, the ones who are cleaning your injectors, etc, etc) are just jerking you around cause they don't know. If you don't fix it properly for real, this is going to continue forever and you may as well just get rid of the car now.
Right, so the idle stabalizer valve and the coil had nothing to do with the problem. Clearly, yet they keep screwing around with this crap. I don't know where you are, but you sound more American than British, so if we are talking a base model 95 US Jetta. I don't even know what the heck an adjustment is. I've never owned one, but I do have the service manual, I don't recall hearing of an adjustment, and all the idle stabalizer valves on A2 cars didn't have adjustments. What the heck would you adjust anyway? On the A2, sometimes you would adjust the throttle stop position to get the ECU to provide the right duty cycle to the ISV, but there was no adjustment on the valve. Yet another thing I have to wonder about.
It depends on the model year. Presumably you have a heated O2 sensor. The 60k miles thing is essentially an EPA recommendation that the vehicle manufacturers are required to parrot. If the car is otherwise operating properly, its very possible that the O2 sensor could last 150k miles. Looking at the output of the O2 sensor and coolant temp sensor would be very instructive here.
I understand. You just need to understand its hell on the car. Maybe you should consider an electric vehicle. Oh wait.. there aren't any yet. :(
Warming up a car is just a good way to waste gas. The car is adequately warmed up within 20 seconds of driving. Just don't drive it hard for the first couple minutes.
Honestly, based your usage model... There really isn't much you can do. Uh oh wait... you said petrol... Now I'm wondering if you are in the UK. Ugh... I don't know how similar the engine electronics on a UK A3 is to the US one. The A2's were probably quite different.
Well, since I have no idea what adjustment you can do to the idle stabalizer valve, I can't comment on that one, but the coil absolutely has no adjustment and I think its unlikely the engine computer would compensate one way or another based on replacing the coil.
There are people other than VW dealers who could do this, but I would strongly recommend someone who specializes in Volkswagens. Heck, at one point I knew more about my specific car than most VW trained mechanics who did nothing but VWs all day long. You might just ask if there's someone local who could take a look at it. Being a VW dealer is no guarantee of good service, sadly enough.
A scanner reading is not a positive diagnosis. Its an indicator the computer thinks something is wrong. Likelyhood is that if the computer thinks something is wrong, there is something wrong, but it may not be what it looks like.