I suppose that anything is possible if you expend enough time and money, but I've not heard of anyone substituting a 5-cylinder Volvo motor for the 960/SV90 I-6. The S80 has an I-6 but it's a generation or so removed from the 960. Again I've not heard of anyone successfully performing such a transplant.
If your state doesn't require environmental certification (it's much more of a legal roadblock with the '96-up cars than an engineering one) the 5.0 Ford V8 and T5 transmission have been transplanted into RWD Volvos for years.
http://www.converseengineering.com/
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