Thanks, but I'm not in the US... The S40 was launched outside the US in 1996. The first 2 years had poor quality control. There were lots of nasty plastic rattles and silly things breaking. These problems were mostly fixed for the 1998 model year, the reason why I've bought that one (the only built quality problem I've had is the head liner material coming loose). I think it's in 1999 that the 2L engine was also dropped to 1.9L turbo (and the 1.8L obsoleted) or something like that, and changed from 16 valves to 20 valves (not sure about the exact details). Then it was launched in the US. My car is Belgium built for the Singapore market, imported to New Zealand (where I am).

I've got a US repair CD with the circuit diagrams, but as you say it's only from 2000 onwards. Thanks for the offer.

Tonight (it's already Friday night in NZ, almost 24h ahead of the US) I've removed half of the dash to see how things work in there, and checked the control cables. All seems fine. Some good ideas you gave me, the temperature does stay fairly low and I've never seen the radiator fan going (only the auxiliary fan when the aircon is on). The temperature knob appears to only control an air diverter flap, nothing else. At the flap there is an arm that the cable is clipped to, and it's got a free (open) second connection point that I would have thought should control coolant flow through the heater core? Or is the temperature knob only controlling the air flap?

You might be on to something regarding the coolant. Perhaps there is an air pocket in the heater core. Will check it out tomorrow.

I was told by the previous owner that the refrigerant was checked and reported to be full, tomorrow I will have a chance to check things out. Any idea if looking at the glass "window" at the top of the receiver-dryer can tell anything?

Thanks, and have fun...