Egr not working after second smog check

my car failed emission not due to EGR but a fuel tank with a hole caused me to fail the pressure test. I replaced the tank and the car passed emissions. after leaving the smog facility, the check engine light came on, i pulled the code and it said EGR problem. I discovered the EGR, egr solinoid, and Vsv(i think this is the name) switch had some vacuum lines connected wrong. the vsv switch hose was not connected at all. so either the smog place or my mechanic messed with the lines. anyhow, i noticed my fuel economy went from 27 to 30mpg. i get better fuel economy with it disconnected. would this burn my cylinders or damage the engine. I like the better fuel economy and am currently driving with the egr disconnected!

Here’s a short little article which will answer some of your questions: http://en.wikipedia.org/wiki/EGR_valve
Will a non-working EGR hurt your engine? Possibly. The exhaust will be hotter which will make the oxygen sensors and catalytic converter run hotter. There will be more NOx produced by the engine which may not be great for the catalytic converter. And, there will be more NOx emissions out the tail pipe.
Was the disconnected EGR the cause of the increased mpg? It’s a nice assumption; but, I don’t know.
What is the code for the check engine light? Isn’t the code more specific than “there is a problem with the egr”?

i believe the code was 071-it is not more specific than egr malfunction, it is a 95 toyota corolla 1.6L. I have been checking my gas mileage for awhile in only city driving, it has always been 27. without egr it is now 30 mpg. i even reconnected the egr and the mileage dropped back to 27 after i replaced the fuel tank. i realize i had a hole in the gas tank, but i was getting 27 with the hole and the egr was working correctly. so, only the egr is a factor or my driving, but i drive the same areas daily. It makes sense mileage would suffer with an egr as it is just recirculating exhaust gasses and they displace oxygen that could be available for combustion. i have read that higher combustion temperature would cause a more complete burn. It would drive the combustion reaction. my only concern is the higher temperature could burn a hole in the cylinder head or burn the valves.