After reading all the posts here (thank you all btw), I decided to go back outside in this 39 degree weather and give the grinder a go. I got as far as grinding off the heads to the point where only the thickness of a washer is left around the perimeter of the bolt head. I did not want to press my luck and grind into the housing. Using a center punch I began knocking the center of the two bolts until the material left over began to mushroom a bit around the perimeter. The hub itself has come loose, now all that is left is to grind the remaining material off carefully. I feel that I can sleep easy tonight as I'm 10 minutes away from getting this bugger free.
I did get the bolts seperately from the hub assemblies I purchased. Must be made out of gold for what Volvo charges for them.
I'll definitely use some PB on the other side before I repeat this nightmare.
The never-seeze is also ready for the new bolts.