Dunno what to say about the O2, check to make sure it's plugged in properly?
For the OBD-II code:
From Ford Service Manual:
Possible causes:
-- Ignition system.
-- Fuel injectors.
-- Fuel pressure.
-- Evaporative Emission System.
-- EVAP canister purge valve.
-- Base engine.
-- Running out of fuel.
First thing it says to check, assuming you haven't recently run out of fuel (which your symptoms don't suggest) is to check the crank pulley for wobble. If the pulley wobbles while the engine is running, replace it and reset the PCM (disconnect battery for 5 minutes).
If not, move on to this:
Continuous Memory Diagnostic Trouble Codes (DTCs) P0301, P0302, P0303, P0304, P0305, P0306, P0307, P0308, P0309 or P0310 indicate a cylinder has misfired in cylinders one through ten. Continuous Memory DTC P0300 indicates a random misfire has been detected.
l Visually inspect the engine compartment to make sure all vacuum hoses and coils are properly routed and securely connected.
l Examine all wiring harnesses and connectors for damaged, burned or overheated insulation and loose or broken conditions.
l Be certain the battery is fully charged.
Next is a check fo the DPFE sensor. DPFEEGR value reading should be within 0.15 volts when comparing key on engine off and engine on values. The value MAY be accessible using your friend's OBD-II tool. If you are using the Alex Peper tool, it would probably be under the "Enhanced" menu.
Next is a check of the coil pack, which is something a dealer or mechanic familiar with Ford PCM controlled spark systems should do by the test methods description I read.
If that checks out OK, move on to the fuel injector harness and injector (#1 in your case). Check harness resistance between PCM pin 71 and 75 (#1); should be between 11 - 18 ohms.
If that checks out, the injector should be flow tested. Basically if everything else checks out, it is more than likely a clogged/faulty injector.