My mechanic tells me that E-brake on the AWD V70s is very hard to adjust, mine is useless and he tried to fix it and could not. He only does Volvo’s so I tend to believe but this just sounds silly. Are the AWD V70 E-brakes a problem to adjust or is my guy full of crap?

It's just as adjustable as the FWD V70 but the adjuster star wheel is harder to see when trying to locate it through the holes in the rear rotors. I use a special small flexible flashlight device (SnapON tool) that goes inside one of those holes. The LRs at about 8:00 and the RRs at about 4:00.
If it's gone from working good to totally inop, like there's now no resistance at all when pulling up the lever and it goes up all the way, one needs to remove the rear rotors and visually inspect the e-brake shoes because it's likely that one shoes material has fallen off its metal shoe backing.
If the cable feels somewhat normal, has normal resistance (tight) but the e-brake simply doesn't work, Oone then needs to be sure the cables aren't binding, best done by checking with rotors off too.

Yep, our 98 XC too has this condition, While I'm doing one of my exhaustive wheel rotations thats when I'll have to check & adjust this E-brake feature which is basically in-op now.
A~