I had been trying to unscrew the 2 bolts without success. So, I went to an auto store and bought liquid wrench and a full set of torx bits (long & short). I found out that I had been using the wrong size torx bit for the job! I thought I read it somewhere here that T30 was the size but no, not for my car. It's T40! With that, the bolts uncrewed easily and the whole job was straigtforward. It's about 1/2 hour job with partial coolant draining (1 quart).

It's working great now--i.e., the arrow stays horizontal at highway speed in a very cold day today.

I used 87 degree thermostat even though the Volvo recommends 90 degree now. I bought it from Megaparts. The only thing is that the gasket seems a little small so I reused the old one--which is in perfect condition (I have a feeling that the thermostat had been replaced once by previous owner with the look of the 2 bolts and the 90 degree thermostat in there).

1995 854 GLT 178k miles