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My moneys on it being the IAT seeing as you get no noticable difference to the engine when you unplug it, that would make me think it's sending no information in the first place! Could be wrong though, just my opinion!
As for your mechanic stating you may need a new engine just because it's running lumpy....well
Currently in scatz's garage:
2004 Subaru Legacy GT Spec B, a 2013 2.0 TDCi Titanium X Sport S-Max and a 2001 Honda NSR125R