Went and got my fluids topped off today at a local oil change shop. The guy topping off the oil said that I have a bad head gasket; the oil is admittedly dark and thick.

What are the signs of a bad head gasket? There's no overheating, and the oil didn't look 'milky' to me, just sludgy, thick and dark.

I'm pretty sure the timing belt interval for changeout is 70 kmiles. If so, you'll want to change it around that time, you do not want it to break.

FWIW, find a better place to get your oil changed, these chain places are dicey. I would look for an independent Volvo shop, will be way cheaper than the dealer. Good luck.

I would ask the oil changer what his/her indication of a bad head gasket was. If it was a bit of milky residue on the dipstick, that can be caused by a nonfunctional (clogged) PCV system.

The amount of grit & grime in the oil was the indicating factor, apparently. It's not milky or frothy just thick and dark and 'rusty'.

I guess the next question is how long was the old oil in there?

If the coolant level is holding constant with no air bubbles coming up in the expansion tank and it continues to run well, I wouldn't get too worried. You might keep an eye on the dipstick now that there's clean oil in it to make sure it isn't getting foamy. Also you may want to verify the crankcase is still pulling a slight negative pressure. That can be done by loosening the oil filler cap while it's idling to see if it tends to jiggle and bounce around or if it tends to hold to the engine from the vacuum inside. Or you can remove the dipstick and attach a rubber glove finger to the dipstick tube with a rubber band and see if the finger wants to inflate (not good) or get sucked down (good).

The place that changed to oil doesn't do head gasket replacements, do they?

it's not the headgasket, thankfully. Just dirty oil.

BUT the dealership told us we have to do the timing belt soon, in 7000 miles. We have 132000 on the car right now. Does that sound right that we're due for the belt?

I'm no mechanic. My husband has brought the car to the Volvo dealership and they'll have a look at it. Praying that it's nothing serious. We can't afford a blown HG.