Steve,

Yes, index steering is caused by a crapped out headset. I knew for a year that I couldn't adjust/remove the stem, so I just rode it until, well, I couldn't anymore.

After I had the new bike in hand a wrench said he could have cut the stem and extracted the fork, installed a new headset and fork. But a new bike is so-o-o much more fun. I still have the old Peugot frame. I plan to build it back up and keep it permanently attached to my wind trainer. . . no steering required.