What can I do to apply for citizenship if I have been living in the US since 1986?

You can apply for a new card and naturalization at the same time.

Your question requires an attorney consultation. It is not a simple question that can be answered on this type of forum. There are many factors that would need to be considered and evaluated. If your green card has expired, and you did not renew it, you are deemed to have abandoned your permanent residency and are out of status. Basically you are here illegally and cannot apply for citizenship.

The "clean" way to do this would be to apply to renew your green card. If you can prove with documents that you have been continuously living in the US, and if you have no criminal history, you should have no problems renewing your green card. Once it is issued, you can apply for your citizenship. The drawback is that you will have to pay to renew your green card. Another way to do it is to go ahead and apply for your citizenship with the expired green card. This saves you the fee to renew your green card. But the USCIS will have to verify that your permanent resident status is still valid though, so you may have to submit proof that you have never left the US. But you should be able to apply for your citizenship without renewing your card. This is a more complex way to go tough, which is why I called the first way a "clean" way.