Been reading a lot on the web about this: problems with 3.2L I6 oil consumption in 2010-2011 XC90s (and other years). It's a common issue that Volvo apparently knows about and is addressing through warranty repairs.

Now, the issue is close at hand because our one-owner 2011 XC90 with 72K miles (FWD NA 3.2L) has the problem. During services, the car has been monitored for quite a while because of high oil consumption and the dealer finally has concluded "the pistons are bad," which I interpret as defective piston rings.

The dealer is engaged (car has only been serviced there) and says it has submitted a warranty claim for a new engine. The other alternative is to replace pistons and rings in the existing engine. Either way, the car is going to be laid up for a while.

A new, replacement engine seems the best way to go. Any downside?

Volvo may have had a problem with the piston sleeves, not the rings. In that case a new block is needed. I would push for a new engine.
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Keeping it running is better than buying new

Thanks Klaus, that makes sense. Apparently on some engines, "piston replacement" is the repair. I'm with you, I think a new engine is the best outcome.

Will keep you posted.