This problem is mentioned frequently on the Board. I was able to fix mine for about $2.00 an an hour's work.

I just repaired this in a 97 850 wagon. You need to get under the dash from the passenger side. Instructions and pictures for this can be found in the Haynes manual and at Bay 13 http://www.volvospeed.com/volvo_performance.php.

Once you get the glove box interior removed you will be able to see the damper motor (black, about 3" by 2") screwed onto the air duct to the left side of the glove box compartment. There are 3 #15 torx screws that hold it in place. Remove these screws and pull the motor to the right (you don't need to disconnect the electrical connection). When it is pulled away you will see a short, 4 sided, brass-colored motor axle that fits into the plastic damper axle. My damper axle was split longitudinally so the motor axle would just spin inside the damper axle without moving the damper.

Go to the hardware store and get the smallest hose clamp that they have (the stainless steel type with the screw tightener). The one I got was about 1/2' in diameter when it was wide open. Fit the hose clamp over the damper motor axle and tighten (not too much since it is plastic, just enough to close the split). Move the damper axle with your fingers to make sure the damper can travel fully from stop to stop and the screw on the hose clamp will not impede the travel.

While the motor is still unmounted, turn the car on and select the defroster position (knob pointer straight up). This will position the motor axle in the correct position. Slide the motor axle into the newly repaired damper axle and replace the torx screws.

Ed