Its ok to run with the 02 sensor after the cat, but you need the one right after the turbo.

The one after the cat is for emmissions

 

I think it might just be the spark plugs maybe my downpipe hitting the transfer case?

 

This might sound stupid, but make sure that your plug wires and your coil packs are all tightened down snugly. Sometimes the little 10mm bolts holding the coil packs down to the valve cover get loose and you lose electrical contact with the spark plugs (which causes excessive misfire in the cylinders). I've seen this happen with a few 03 Evo's. Also, there is also a TSB for this code, and any dealership should be able to revise your ECU for free to get rid of this problem (sometimes it works, sometimes it doesn't). Good luck.