Turns out a couple of years ago, while replacing all the cracked vacuum line elbows, I installed a new black/white check valve on the SAS vacuum line.

Apparently, my brain doesn't compute the direction arrow when there's a vacuum. Installed the new one...backwards. Fortunately, that diagnostics came free with the timing belt replacement.

When I come up with something no one on this board has seen before, it's always something I've inflicted on myself. Not a Volvo issue.

In between the back of the power steering pump and the intake manifold you have a fitting that fails often. Take a flash light and aim it just below the thermostat housing.

I know that you are in California and the 'testing' is tough, but you could turn off the SAS completely. A simple diode added to the ECM and unplugging the SAS pump: http://volvospeed.com/vs_forum/topic/140772-sas-air-pump-deletewrite-up-with-pics/

I did my car by pulling off the cover of the ECM, much easier than splicing/dicing the wire bundle.

I have since removed the SAS pump, plugged the valve at the exhaust and have a much cleaner engine bay. Car seems to run better also.

If you plan to keep the pump, you will need to check all of the small vacuum lines, from the pump to the radiator and then to the manifold and rear valve. If you have pump noise after the 2 minute warm up, the relay could be at fault.

Rear O2 sensors don't fluctuate much, if at all. They can get dirty and die with age. Mine needs to be replaced, but at $130 I will just delete the code and wait another month.
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My back feels better when I sit in a Volvo seat