The way I used to tweak the AODE idle before Wes chipped me was to leave the bleed screw at 1.5 turns from seated (any more created a slow return to idle). Then I'd just use the stop screw, like you plan to do. All my fine tuning was done with the stop screw. This worked ok for me because the IAC can raise the idle but once you go over the commanded idle (like I did, and you're trying to do), it can shut the IAC off but the idle should not go lower. I probably ran the stop screw in 4 turns from where it was when I bought the car (who knows where it'd been previously adjusted however).
I mark the bleed screw head and the throttle stop screw with a scribe and marker and take notes of all adjustments so I don't lose track of where I am. I keep a running tab of adjustments in the front cover of the repair manual.
For a comparison, when I had my hot unloaded idle at 800 with the idle stop screw, my cold idle flashed to 1500 upon cold start up.
Having a tune/chip and not knowing the specs creates a lot of variables. See if you can get a copy of what was done with the chip. I have the B.E. files that Wes created, for instance.
Can you view Pids (you need a scanner, like an AutoXray 5000)? If so, you can see the duty cycle of the IAC. This helps one to see if it works.
The biggest thing we can see right now is that the cold idle isnt significantly higher than the hot idle. If the ECT is working properly, the cold idle should obviously be higher. Does the idle increase if you turn on the AC or a huge electrical load? It should.
What I'd do: Get it to idle nice and high (750-850 RPM - whatever you want) with the idle stop screw. Now see how the cold idle does. If it idles low, and you dont have load compensation for the AC (etc), then it very well could be that the IAC is bad. If the car idled fine after the chip but before it recently went screwy, then one could assume that the tune didnt hose with the IAC function too badly (because it had a decent idle with the chip in place before).
Good luck.