with a drop that drastic in mpg, the first place I would start is the catalytic converter.
Mine was gone after 68,000 miles. Totally F'ed... Try to see if shaking the cat causes the cell inside the cat to rattle. If it does, time to replace it. Otherwise, start checking other things like the temperature sensor. I beleive that that may be one of the things that the PCM relies upon in order to properly run in closed loop.
this is my reference from
http://www.v8performance.com/tipsandtricks.htm
Open and Closed Loop Operation:
There are 7 different modes (conditions) that are used (besides Key-ON and Key-Off mode). Here is a table of what sensors are monitored and what determines the mode. One thing to remember, under OPEN LOOP Operation, the O2 Sensor(s) are ignored by the PCM.
Engine Start-Up Mode (OPEN LOOP)
Battery Voltage
Coolant Temp
Crank Position
Intake Air Temp (IAT)
MAP
TPS
Starter Motor Relay
Cam Position
Engine Warm-Up Mode (OPEN LOOP)
Battery Voltage
Coolant Temp
Crank Position
Intake Air Temp (IAT)
MAP
TPS
Cam Position
Park/Neutral Safety Switch (Automatics Only)
Idle mode (Once at Operating Temp: CLOSED LOOP)
A/C Select (if equipped)
A/C Request (if equipped)
Battery Voltage
Coolant Temp
Crank Position
Intake Air Temp (IAT)
MAP
TPS
Cam Position
O2 Sensors
Park/Neutral Safety Switch (Automatics Only)
Cruise Mode (CLOSED LOOP)
A/C Select (if equipped)
A/C Request (if equipped)
Battery Voltage
Coolant Temp
Crank Position
Intake Air Temp (IAT)
MAP
TPS
Cam Position
O2 Sensors
Park/Neutral Safety Switch (Automatics Only)
Acceleration Mode (OPEN LOOP)
A/C Select (if equipped)
A/C Request (if equipped)
Battery Voltage
Coolant Temp
Crank Position
Intake Air Temp (IAT)
MAP
TPS
Cam Position
Vehicle Speed Sensor
Park/Neutral Safety Switch (Automatics Only)
Deceleration Mode (OPEN LOOP)
A/C Select (if equipped)
A/C Request (if equipped)
Battery Voltage
Coolant Temp
Crank Position
Intake Air Temp (IAT)
MAP
TPS
Cam Position
Park/Neutral Safety Switch (Automatics Only)
Vehicle Speed Sensor
Wide Open Throttle - WOT (OPEN LOOP)
Battery Voltage
Coolant Temp
Crank Position
Intake Air Temp (IAT)
MAP
TPS
Cam Position