classic air pump sound...your motor is squealing because of poor Volvo design...Many many air pumps and check valves have been replaced on these models under the original warranty, and are now failing again in spite of fixing the original cause! This is just poor design. Late models no longer have these pumps. If your air pump motor seizes or draws too much amperage (and it may not until next winter), you will get a check engine light. Your car can't pass an emission test that way and you will be forced to have it repaired. But guess what? The air pump isn't covered under the extended emission warranty! This problem should be addressed by a Volvo recall. It is TOO WIDESPREAD.

if the noise is present only when the engine is cold(1st start of the day) and disappears when the engine is warm, this is normal according to my manual. It is the air pump blowing air into the exhaust for faster warm-up to reduce exhaust emmissions.
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'88 240, '92 740, '98 v70 GLT John in Tampa Bay

If the noise is on the very front left(drivers side), It is possibly the air pump that is about to go bad. Look at Bay13 at www.volvospeed.com. They have very nice instructions to repair. Mine just went out and am about to repair also. Your looking at about $500 U.S. to repair. I have a 98 V70 AWD also. sounds like a common problem with these miles. Mine just turned 89,000 miles. Still love the car though.
Mase.
'00 V70XCSE, '98 V70AWD, '83&'84 240 Turbo's

UPDATE - Sounds very much like some electric motor that is about to bite the biscuit... poked around and could not source it...