The diagnosis for your 1998 Toyota Camry's high CO fault needs to begin with
an inspection of the fuel injection "feedback" system. This includes
ensuring the oxygen sensor is working properly, your Toyota Camry's
emissions computer is receiving the signals from the oxygen sensor, the
computer is computing the data properly and sending the correct signals to
the fuel injectors to either increase or decrease fuel delivery to the
combustion chambers.
Toyota Camry Fuel Feedback Test: The feed back test will utilize a 5-gas
analyzer (usually a smog machine) and propane. The smog mechanic needs to
add propane to your Toyota's intake manifold and ensure the oxygen sensor is
reading the added propane as an increase in CO; and ordering the ECU
(computer) to decrease fuel delivery at the instant propane is added to the
system. This test should be done after your Toyota Camry has sufficiently
warmed up and while it's running at idle. Using a voltmeter the smog
technician should observe the voltage output of your Toyota's oxygen sensor
as the propane is added. Voltage should increase. If there is no increase
this indicates that the O2 sensor in your 1998 Toyota Camry is defective.
The sensor should be replaced and the test started over. If voltage increase
is present at the sensor output the technician needs to ensure voltage
increase is also present at the computer input terminal. If voltage is
present at the terminal as well next the technician must ensure the computer
output terminal to the fuel injectors are lowering "injector pulse rates".
At the end of the feedback test it will be know whether your Toyota Camry's
high CO fault is electronic or mechanical, and the technician can further
diagnose the fault.
As far as your Camry's air filter... I'd recommend a replacement if CO was
slightly high, but in this case with the CO numbers as high as they are, I'd
recommend a feedback diagnosis first. I think the problem might be more
serious then a dirty air filter.