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Looks like everything was checked but how about the fluid level and when was the last time it was changed?
Although this is listed as a "Lifetime Fill", that is pure BS. Any fluid is going to wear out over time - no avoiding that.
Have the fluid replaced with the proper spec fluid JWS3309. The dealer wants too much for the stuff so do a search for AVLubes. They sell the proper stuff for about 50 bucks a case. You can flush the fluid yourself by going to S40concepts.net and searching their how-to section for the procedure. A guy there did an excellent write-up with pics. Also has a link to the AVLubes site.
I would lay money that this will resolve it.
Good luck,
mormit
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02 S40 now my daily! :), 98 V70 T5 new wife mobile-very nice!, 85 245DL 275,000mi V15cam It takes a licking and keeps on ticking
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