I said I would be back here and report what the Volvo mechanic found with this pesky knock sensor problem. Turns out that it was a bad wiring harness to the knock sensor. But what caused the mechanic to chase his tall around the garage was when he replaced the harness, he wired it wrong. So the knock sensor light still came on. He ended up talking to someone at Volvo HQ and and they told him he had a bad wiring harness. When he told them he had already replaced it, they told him he must have it wired wrong. Yep! That was it. I now have a car wihout the check engine light on.

Thanks for all of the tips given here. This is a great board...

Have you replaced the fuel filter recently? I was getting the code all the time until I replaced the fuel filter...gas was not flowing correctly so it would make the engine knock a little and set off the sensor.

If you do a lot of low speed driving, you may just have some carbon buildup. Cleaning out the combustion chambers may help.

If the techs replaced the knock sensors and did not position them correctly, they will not work properly.

Klaus
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The 164 has a new home, all I am left with are a 95 854T and a 98 V70R :)