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'86 eta runs great, then sputters and dies

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    '86 eta runs great, then sputters and dies

    I've had my '86 eta for almost 3 years now, but I hardly ever drive it (getting an engine swap). When I do drive it, it runs great. Here's the recurring problem: Starts just fine- nice and strong. Idles well at around 1k prm. Drives great. But once fully warmed up and driven around 5 miles, the idle suddenly rises to around 1800-2000rpm, then (only when driving) it'll suddenly cough, sputter, and die (usually within 2-3 blocks from when the coughing starts).
    The car is 100% stock: DME, intake, exhaust, etc
    IAC valve is new with new hose from IACV to intake boot. Engine did the common idle dance with the old IACV (which I cleaned several times).
    Gas is good.
    Engine temp is midway on the gauge when problem occurs.
    The engine has high miles, ~250k and is leaky. In fact, it smokes in the engine bay when fully warmed up, but no smoke from the tailpipe. Lots of perished seals, seems like.

    When my mechanic pinched the hose between the IACV and intake boot, it lowered the idle from ~1800rpm to a normal 900-1000rpm's.
    Unpinched, the idle rose again to around 1800-1900rpm.
    He unplugged the IACV connection and the idle surged higher.
    When the coughing begins, it seems almost like a sensor is overheating, causing it to fail. It'll lurch the car (5 speed) like a toggle switch. Feels like it's losing cylinders.

    I've searched and gone back around 15 pages in the M20 section, but haven't found a similar problem write up. Is this the right place? Anyone know what's going on? Thanks to all knowing minds!!

    Idle issues are probably the single biggest headache with these cars. "and is leaky" tells me you're probably pulling in uncontrolled air someplace. The best, all in one place, explanation and trouble shooting guide I have found is

    Good luck!
    2004 525i Manual - 1985 325E Coupe Manual