You don't need an O2 sensor on each bank, I think only the HD Magnums were set up that way and I believe they're not smart enough to adjust one bank of injectors and not the other. Here's my OBD1 engine setup, for reference:
- Doug's long tube headers, with a single O2 in the right collector.
- I switch between the factory PCM and the Mopar Performance PCM, depending on whether I want to spend the money for premium fuel.
- 52 psi filter / regulator.
- Hughes
SER0814ALN-14 cam and their spring kit.
- Mopar Performance M1 intake.
- 53 mm throttle body
The car runs great, so I don't think the headers or single O2 are your issue.
I don't remember, did you try disconnecting the O2 sensor? Mine went bad a little while ago and the car ran like garbage, but when I unplugged the O2 it was fine - just running in open loop, so way rich.