On the way to work this morning my AFR was doing a disco thing with lights flashing up and down like crazy, then sitting on "rich" for a while. This was after the car was up to full operating temperature. Could this be a sign of the lambda sensor failing?

 

That sounds perfect to me... If the lambda was on it's way out, you wouldn't get any disco lights on your AFR, and it would read about 0.25v, dropping further and further as the lambda gets hotter and hotter. That's what happened to mine anyway