Dan,
If the belt is new, and the indy put it on one tooth off, it should stay that way. The setting of the tooth off makes it too advanced, or too retarded, but not both which is what the original post stated! The only plausable explanation for this change is the belt is slipping multiple times, or there is a problem with the varible timing mechanism. I know NOTHING about how the varible timing works or how to trouble shoot it. Perhaps someone else can help. While figuring the varible time is difficult, checking the tensioner should be straight forward. As Klaus suggested, push on the belt and see if there is tension, and that it goes back. The setting on my V70 is this will feel relatively taught. The tensioner on my car is just a spring loaded roller that has a mounting screw slightly off center that allows a person to slightly adjust the tension. If the mounting screw on mine is not torqued down, it could move and allow the tension to decrease, and thus the belt to slip.
I looked up several of the V/S40 models at FCP Groton, and they all show the same mechanical tensioner that I have on my V70, but I didn't look up all the possabilities, as I didn't know the engine size or if it was a turbo or not. So if this tensioner was not torqued correctly when it was installed this may be the issue (cheapest one, and pretty easy to fix), or it has something to do with the mechanics of the varible timing, which is unlikely, but possible.
Please let us know, we'll keep trying to help. BTW, I find it unlikely the car should need extensive work like the indy wanted with only 55K on it, or that he could diagnose the issue to the varible timing mechanism. It is also likely you would have received a similar response from the dealer if this was true. I'd get this solved and then find a new indy!
Jerry
01 V70 T5
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