Will be grateful for a few pointers of what might be wrong with my 325. The only symptoms I've noticed are a lack of power, a whiff of petrol and the odd backfire/pop from the exhaust so it seems to be running rich.
Backfiring to me sounds more like a timing issue.. Have you checked the distributor cap/rotor arm/plugs etc etc. Checking the plugs will also help to guage if the car is running rich or not, or if it's only one or two cylinders causing the problem. If it's overfuelling they'll be black and sooty.
Often the smell of fuel on M20 engine'd cars is the fuel hoses under the bonnet. They often develop cracks and weep along their length. Does the car have trouble hot starting? The weeping can cause low pressure at the fuel rail so the car requires a few cranks to start. Left un-checked it's a fire hazard and cause weeping of another kind!
If the car does appear to be running rich, the temp sensor is a good place to start.