If that sensor goes, the computer doesnt know where the cam is relative to the crank, so it shuts down to prevent itself from ripping itself apart. Its under the timing cover and under the cam gear on the driver's side of the motor. There's a fair bit of disassembly needed to get it out (the whole timing set), so if the car is anywhere close to 90,000 miles, just do the entire timing belt/water pump job. Its probably also wise while you're in there to change the crank position sensor on the side of the oil pump... that one's also going to eventually crap out.

Our 2002 Civic was doing the exact same thing. We have 140k on it. The diagnostics kept coming up with the TDC sensor, so we replaced it. The car worked fine for about 50 miles and then started do that fading out thing. We took it to the dealership and they said that we needed to replace the catylitic converter, and wanted to charge us 1800 bucks. Well we've had plenty of catylitic converters replaced in our life time for under 200 bucks, so we took it somewhere else to have it replaced. Car continued to do the limp thing usually when in 5th gear for a prolonged amount of time. (check engine light came back on) soo we took it to a different honda machanic. It was indeed the catylitic converter, but un-known to us, honda vehicles only want honda parts....and yes, they had to put a honda catylitic converter on (1200 bucks), but they also had to replace the pipe that the other shop had cut to fit the non-honda converter. (another 200 bucks). so in the end we spent 1600 bucks to replace the converter....200 for 1st non-handa converter...1200 for new HONDA converter...200 for pipe. Car runs great now, and I'm sure it will last another 140k miles. HAVE YOUR CATYLICTIC CONVERTER checked out.