HELP!

We have a 2000 XC V70 4 WHEEL DRIVE wagon.

Symptoms: When started up put in drive and a loud clunking sound happens, is repetitive.

Garage Diagnosis: When up on lift, inspected underside, determined it was a transmission problem, specifically an ANGLE DRIVE/GEAR PROBLEM. Cost to repair w/re-built part(s): from $2000 to $4000.

IMPORTANT: 1 year ago, car was hit hard from behind at a stop light. Autobody repair done but we always were worried about the frame and innards. Doors wouldn't shut accurately and other problems.

IMPORTANT: COULD THE HIT LAST YEAR HAVE ANYTHING TO DO WITH THIS ANGLE GEAR PROBLEM? With only around 110 miles on car, we're very surprised this part went so soon. We had the timing belt changed (advised to do so at 100 miles) last June.

ANY ADVISE WOULD BE GREATLY APPRECIATED. WE LIVE SOUTH OF BOSTON, MA Thanks. Jim

It is not clear How bad the damage was from what you have stated..
You talk about the doors not correctly fitting, etc.... is that after repairs???
Volvo's pride themselves on collasping and thereby reducing energy transfer to the occupants. If hit hard enough, you need the frame and the power train checked for damage/misalignment (by a top notch repair shop).
Hit in the back: Also, Very carefully check the tailgate gasket is sealing properly..any misalignment or incorrect gasket compression will allow exhaust gases into the back of the car.