Is it a turbo 850? Some early OBDII Volvos have problems with the readiness tests. This is a complex deal invented by the EPA to try and solve the problem of people clearning trouble codes right before a smog test.
There have been many articles written about these problems.
See:
http://lyberty.com/car/obd-issues.html
http://www.smogcheck.ca.gov/ftp/pdfdocs/APPENDIX_J.pdf
It could be worse, like the VW models where replacing the radio with an aftermarket unit can result in damaged scan tools!
John
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