My '88 307 -no power,poor mileage,check engine light on

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I haven't had any high idle issues but did notice when trying to start it after a few months with stale gas a funky exhaust noise, like a bad cam lobe(s). Since getting it running again I don't notice that noise. I haven't checked the 02 sensor, where is it exactly? I suspected the cam for a bit but didn't hear any popping through the carb. A friend said exhaust lobes pop through the carb and worn intake lobes pop through the exhaust. he recommended a compression check. I plan to check the 02 sensor when I find it and have a compression check done. I am considering a Hurst or 442 style cat back exhaust since the single exhaust is pretty beat, if anyone has one to sell.
 
I believe the O2 is on the passenger side and you should see it from the engine compartment. Before you do a compression test you can see if you have any problem with valves by taking a piece of paper and holding it over the tail pipe. If the paper is sucked back towards the pipe then you know you have a bad valve. If you do the compression test and you find a cylinder down you can pour in a little oil down the cylinder and if the compression comes up then the rings are leaking. If it stays the same the valves are leaking.
 
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