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A notorious problem for 1996 and 1998 model years.
In the 1998 70's, it's most likely a failed ABS controller (if you have TRACS, that light is on, too). The PC board cracks, breaking connections, usually to the RR wheel....if an OBD scan returns an error code for the RR wheel sensor, it's really the ABS control module.
The part is $358 purchased over the internet, $416 at the Volvo parts counter. It goes under the ABS block. The replacement part is apparently more durable; callbacks are rare on the replacement part.
Don't overlook another potential cause for this problem -- the ignition switch. If monkeying with the key turns the light off, for example, then you'd have to begin by having this part checked out.
If it's the ABS controller PLEASE REPORT IT TO THE NHTSA, the USDOT agency in charge of safety recalls and TSBs. Perhaps if they gather enough data concerning this problem, they might force Volvo to do something, You can fill out the report online at http://www.nhtsa.dot.gov/cars/problems/ivoq/default.htm
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David \\ (98 S70 T5SE Black, misc mods (mostly lighting), red calipers) (92 940GLE)
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