My A4 has radical power loss, stumbles - but only for a minute after start

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Hi folks, new member here, desperately seeking your advise or help!
I have a 99 A4 1.8T Quattro (B5,~ 170k Km), which about a month ago started doing this while on a long car trip, seemed to happen only occasionally but now consistently whenever the car is started cold or a little warm-
no problem starting ( instantaneous) but idle speed is unsteady, and when taking off, a few seconds later the engine completely bogs down, hesitates, gives an occasional small backfire, and just seems to loose practically all its power, barely being able to accelerate at all. flooring the pedal only makes it worse. then, after a minute or 3 of this, the car surges forward and everything seems to go back to normal, for the remainder of the trip.
The CEL has been on since i got the car a year ago (not blinking), i took it then to an independent Audi-VW mechanic and they said the turbo wasn't working ( no boost) due to a broken wastegate, they found bits of it in the front of the cat. Other than having a little less engine power, the car has been working fine and was drivable. I was waiting to find a good deal on a used turbo to change it, until this last problem appeared.

The mechanic spend an hour checking things last week and came up empty - he's baffled. Coils are good, changed plugs, no apparent vacuum leaks.
Said O2 sensor is probably bad, but it woudnt explain my symptoms- might be the cat, but every experienced mechanic / muffler shop says when the cat is plugged, it stays plugged, so it wouldn't act intermittently like this is.

Scan codes read:
O2 sensor - B1S1
Charge pressure deviation ( i.e. turbo not working, knew about that)
B1S2 Limit reached
LTFT B1 Lean
LTFT B1 Rich

Any ideas ? Could this all be caused by a bad O2 sensor, or is that just a symptom of a dead cat?

Has anyone heard of or experienced this sort of thing before? what caused it?
Is there a definitive way to test the Cat or O2 sensor before i spend some big $$ on replacements?

What other checks should i do?

Thanks!