tw3124

26 is definitely intake air temp sensor with the pre-OBD 2.5, and the fault symptoms are consistent.
 
Are you looking in the right spot?  My manual says its a temperature and pressure sensor unit bolted to the manifold just to the passenger's side of the coil pack (it actually sits under the spark lead boots when they're inserted).
 
sensor.png
 
Couple of diagnostic steps attached...

Thanks Duncanm,

I found the sensor and checked the resistance of the sensor itself with a multimeter. I’m not sure if I have done it correctly but I tested the middle two prongs of the sensor and got back around 8 kOhms. The manual says it should be between 1-3 kOhms but my dad tested the sensor on the old engine and it returned the same resistance as the one I tested.

So either both the sensors in the engines are faulty or I have read the manual incorrectly and tested the resistance of the circuit incorrectly. Were those the two pins I was supposed to test or have I completely misunderstood what the manual is telling me to test?

2 long flashes = 20, 4 short flashes = 4. This equates to a code 24.What did the replacement engine come from?Are the fuel lines plumbed in correctly?CheersBennie

The replacement engine was out of an auto 1999 Liberty that my dad had back home. The car we swapped it into was a manual but we changed the flywheel and starter motor and as far as I’m aware they are the only differences in terms of the engine.

I am pretty certain that the fuel lines are plumbed correctly purely because we had the engine running but I’ll double check those as well.

Gen3 doesn't have AVCS (variable valve timing). Did you get the CEL and decode via it's flashes? The codes starting with "PO" I'm certain didn't come into Gen3 until the facelift where they got an electrical overhaul.
You might have to decode the fault using the old system. So say, 2 long flashes = 2 and 4 short flashes = 4. 
Did you put a new timing belt on the replacement engine? If not, check the crank and cam angle sensors are plugged in. If one of those is not plugged in, it'll do exactly as described.

Ahh that makes a bit more sense then.
Yeah I found a thread on this forum that describes how to read the fault code using the CEL. The code would be 26 I think.(2 long 6 short) which from the list of codes provided in that thread said air temperature sensor. But when I looked at the location of the air temp sensor in the manual their is no sensor in the same place on the air intake. Which leads me to believe I am looking through the wrong manual haha. It looks like there are two sensor just before the butterfly valve in the throttle body so I am wondering if one of these is the air temperature sensor, or have I misinterpreted the fault code?

The timing belt was changed a few years ago but I’m pretty sure both the cam shaft and crank sensors are connected, though I’ll test them with a multimeter tomorrow to make sure.