Mitsubishi Repair: High Idle / Poor Mileage, mitsubishi montero, coolant temp

Question
I have a 1989 Dodge Raider,(Mitsubishi Montero) 3.0L V-6, manual trans, 206k miles, fresh engine rebuild at 204k. On cold startup, engine rev's to 2000 rpm and stays there until it obtains operating temp. It then will idle down to about 750rpm. Engine seems to run just fine afterwards. Good power etc. This problem was present before the rebuild also. Vehicle gets around 10 miles per gallon. Previous owner said she got around 22 mpg.

I took it to a mechanic ? who ran a code check and told me that it was the crank/cam sensor in the distributor that was bad. It was going to cost $300 to have it replaced. I took the car home and bought a service manual. I checked the distributor voltage and it was in specifications. I pulled it out and tested it per the manual, 5v every degree and 5v every 120 degree. I pulled the coolant temp sensor, and checked it with the hot water. It showed to be within specifications also. Thermostat good also. I don't want to spend $300 on a distributor if I don't have to, but I will if it will fix the problem. Could it be the distributor? If not, any ideas?

Thanks

Answer
Lyle,
Your questionable mechanic probably had some expensive parts he wanted to get rid of, so he tried to sell them to you.  His diagnoses of your engine couldn't have been more wrong.  If your cam angle sensor was off, your check engine light would come on, and your car would run horribly, if at all.  The same goes for if your distributor was bad.

The high idle on cold starts is 100% normal.  All of my cars idle very high in the cold mornings and all settle down to about 800 RPMs at normal operating temperatures.  Also, engines will use more gasoline in the colder months then in the summer months.  A car I have would get 35 mpg in the summer, but is not down to about 25 mpg.  

If you really feel your bad gas mileage is not merely due to the cold weather, then there are a few things you can check/replace.  Change your air filter, fuel filter, and PCV valve.  Check in your service manual on how to test your oxygen sensor.  When your O2 sensor goes bad, your gas mileage will go way down.  Check for leaks in your intake and exhaust system.  That, too, can contribute to lose of gas mileage.  And if you did not do it when you rebuilt your engine, replace your spark plugs and spark plug wires if they look worn and fouled.
Good luck!