He does have more than one problem but HC is not an indication of rich mixture unless the engine is in rich misfire and his CO is nowhere near bad enough to indicate that. As you pointed out he has decent combustion. The slightly elevated cat temp is likely due to HC although I'd expect it to be higher.
Another indication of decent combustion is he claims an average of 2.4 on Vf with the diag jumper in. That implies crosscounting at close to stoichiometric. It'd be nice to know the frequency though. Plus the signal shows slightly lean so why is the CO slightly high? Tough to tell with the stone age tools he's working with
Generally speaking, engine out HC for this engine should be around around 2.0 - 2.5 gr/mile, which is close to what he got on the test. That implies somewhat normal HC passing through a weakened cat. It's also why I don't suspect misfire. The bugger is CO being lower than typical engine out levels and a catalyst temp showing at least some oxidation is taking place.
Then again that's all under closed loop and his problem seems to be under open. Based on that and everything else I've read I'm going with you and betting on a weak oxidation bed. Without gas analysis changing the cat would be the only way to know. This is all theoretical though. It's tough to do this stuff on the internet, especially when I'm an ASM and not a IM240 guy. Even tougher when I look at the three analyzers I have sitting here
