My guess is that the IPD rear sway bar is designed to replace the factory sway bar for improved handling so it is more likely to be thicker than the stock bar. This will make the rear of the car ride harder. That is the trade-off for better handling - stiffer ride.
I agree with the others. Probably a broken shock mount. Happened on my 850 too. Could be a broken spring.
One more thought... Check the mounting parts on the factory sway bar. Perhaps a sway bar mount broke?
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Will I buy another Volvo??? We'll see....
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