If it makes you feel any better I'm in the process of putting $1000 worth of parts and machine work into a valve job on a '67 122. Granted, I'm replacing the cam, lifters, timing gear, and timing cover (modified for a lipped oil seal) too, but the point is to keep it a reliable car to drive. Being a ~50 year old unrestored car, it probably isn't as nice as your XC90, and for sure it is not as quiet.

Tasca Volvo will sell you a cyliner head for about $2000. Lets say the shop charges you another $2000 to install it and replace the timing belt, tensioner, serpentine belt, make a boat payment, etc. For $4000 are you going to be able to get a car as nice as the one you have ?

It is a big chunk of change, but I think for $4k you are looking at a 10 year old Chevy Impala. Not that Chevy Impalas are bad cars, but... With 200,000 miles on the clock it is not surprising that it needs some engine work. At the end of the day, it is your call.

Greg