Ok I have been searching and have read every thread I can on CEL1, O2 sensors, Knock issues & exhaust leaks however I'm still at a loss, hopefully this will shed some light....

I'm running a 4th gen H22A with ebay manifold, decat & fujitsubo catback system.

When the car is warm I get the 2-3.5k hesitation sometimes.. after that it feels like the car is running retarded and sometimes it will throw the O2 CEL (code 1). However I have replaced the O2 with a brand new one and I don't believe there are any leaks in the exhaust system (can't smell exhaust etc when I am stopped and the AC is on). I can't see any sooty deposits around the joints either.

Timing is good, engine coolant is good, passed the EGR test etc.. Running a new distirbutor (less than 6 months old) and sparks are about a month old.

Could it be the knock sensor retarding timing and then causing fuelling to be way off? (I am getting worse mileage). I believe the baffles in the backbox may be starting to go... could that cause an O2 CEL and hesitation?