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Actually, there is a code for a bad cat, but it really is a combination of codes that produce that code.
I understand what you are going through. My wife's Audi had a bad rear O2 sensor code (according to the dealer). The new O2 sensor (OEM) lasted for less than 12 months, so the dealer replaced it. When the error came back, the 'solution' was to replace the cat at $1200+. After much searching, I went to a muffler shop and had both flex pipes replaced as they were leaking ($200). This solved the problem for another year and we sold the Audi. It has TWO cats and a total of 4 sensors.
I currently have a rear O2 sensor error on my 1996 850. The generic scanner I have doesn't break down the errror like a Volvo scanner will, so I am left guessing. Because this is a 'project' car and I don't live in a test state, I just clear the code when it comes back. The exhaust is a bit loud and I am not sure if the flex pipe needs to be replaced, that would require a new manifold.
Your car is 16 years old... Buy yourself a cheap scanner, Amazon has them, so you can take your own readings. And look around for an S80 with a 2.5L engine - newer than 2002.
One from my neck of the woods: http://www.kbb.com/cars-for-sale/details/?listingid=341854828&totalresults=6&index=5&atcmake=volvo&atcmodel=s80&searchtype=all
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My back feels better when I sit in a Volvo seat
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