Never saw a downstream cat that changes A/F ratio, they are only for determining cat health. Maybe on a brand new car, but not an old S 10.
The CEL keeping the system from going into closed loop is possible, but its more dependent on the code generated and failure type than the light itself. But it DOES happen.
It sounds to me like the upstream O2 sensor is the trouble, however without knowing the exact code we cant help further the diagnosis.
You need to get the code , and if you go to autozone or something get the correct SAE number for the code. Write it down.post it here.
Last time someone came in with a scan test from autozone it had some off the wall number/listing that made no sense, and i had to scan it anyway to get the correct SAE number.It was a ford, the code number made no sense, and the code description was WAY off from anything discernable.
Its quite possible that the muffler is plugged from remnants of the cat as it most likely partly disintegrated before it was finally gutted. All the pieces would have to get caught in the muffler if anything broke loose, which does happen.
You can determine that by unbolting the exhaust at the back of the cat and then driving it to see if the power improves.
Fact is stranger than Fiction