Sounds like you just need a new blower motor as it has siezed. I have ordered from these guys before but the price seems higher than what I recall a few years ago when I did this with out 850. http://www.eeuroparts.com/productdetail.aspx?searchResults=1&code=8126 www.fcpgroton.com also has the same one for $165.
There may be other vendors with better prices out there. Others can chime in. You should disconnect battery negative lead (at least 10 mins) so you don't activate the airbag in the same area as the blower motor. It's pretty straight forward...open kick panel under passenger's side (1 torx screw I believe, but your model might be different), remove glove compartment, and metal cover over airbag balast area. Carefully disconnect all wire clips (air bag too), and get everything out of the way until you get to the blower motor further down. After the swsp, re-attach all connectors, and put all back in with the torx screw. Then connect your negative battery cable and set your radio code, hours and minutes on your dash and you should be done. Eventually all of these motors seem to sieze up.
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1998 S70 T5 Emarald Green Metallic, 2004 V70 2.5T Ruby Red, Previous Owner of Black '94 850 Turbo Wagon. My cars have been running so well lately they've got me worried.