OK. Error P0128 was bogus: nothing wrong with thermostat for now. Just a fluke. The P0344 was real and Oh boy! Did it mess up engine operations. After replacing CAM sensor everything works fine.
Word of caution to every DIY who attempt to replace CAM sensor (as always you shouldn't blindly follow advise from forum; you're responsible for decisions you are making):
Whatever you do do not break vent pipe from valve cover to oil separator. If you do break it you have two options:
a. if it snaps in the middle go get some heat shrink tubing or high temperature electric tape and use those to keep brocken parts together.
b. if you want to restore to original state, listen to me take a long flat screwdriver and break that damn PITA connector ring off the pipe and CAREFULLY work that pipe from the oil separator. Then install new pipe again CAREFULLY work it in down below. The danger is breaking mounting tabs of oil separator.
I can't stop wondering what stuff responsible engineer was smoking/drinking/swallowing, but 30% glass filled Nylon12 is very wrong material for this application. Unless it designed to fail. Yes, 125k mi 7 years, some can make argument, is respectable age...
Any way, oil separator and pipes are made from rigid 30% glass filled Nylon12, after 7 years sitting next to the engine block at temperatures approaching 120degC in summer it bound to become extremely brittle and will not take any load induced by disconnecting plastic pipe that stuck there.
To realize ramifications just read DIY for replacing oil separator. http://forum.e46fanatics.com/showthr...=oil+separator