I am facing an issue with my 2000 Jeep Cherokee XJ that has stumped myself and two of my mechanic friends. With no muffler attached, the jeep drives perfectly. With a brand new stock muffler and tail pipe attached, the jeep has slightly less power. With a muffler, when you really floor the throttle on the highway, the jeep enters limp mode at ~4800 RPM / 70MPH and the CEL starts blinking. It will either briefly cut the gas(basically a 1 second blip, and the jeep shifts up) and limp mode ends/CEL stops blinking, or it will really cut the gas down so you fall down to 2000RPM, and the CEL blinks until you restart the engine. While blinking, you cannot go past 3000RPM or you'll hit a rev limiter. Once you restart, everything is normal again.
The jeep has new spark plugs. Compression on all cylinders are within normal range. Camshaft position sensor is correctly aligned. The muffler and tail pipe are brand new, and I have tried it with a brand new cat, but it had no effect on this strange behavior.
The jeep is throwing P0301. This code only seems to appear after hitting hitting limp mode.
I first saw this behavior shortly after replacing the muffler, but I've talked to a few exhaust shops and they all tell me a new muffler could not cause enough back-pressure to result in this behavior, and there must be something else wrong with the engine. I first saw this blinking CEL when merging onto the highway at a brutal onramp near my house. I've once seen the same issue at lower RPM during a long drive. With this new muffler attached, my top speed is about 75MPH on flat ground - normally it is 85MPH. Looking for any advice.
