Ahhh, Volvo country! There should be a multitude of Indie Volvo garages available in your area. The cabin heater core is not difficult to get to or replace, just unscrew the kick panels under the dash, skide off the kick panels on both sides of the center console under the dash and all is exposed. 1 hour tops for a good garage, 2 hours for a first time DIY'r.

The question you need to ask yourself: did the garage not top off the coolant bottle after replacing the heater core or are you experiencing a leaking head gasket? I vote for the first option. After a shop does a compression test on a cold engine, which leads to false readings, and finding one cylinder with no compression, the shop should have then tested the engine oil for antifreeze contamination to confirm the headgasket failure.

With temps in the low 20's, these 850's seldom get the engine oil hot enough to burn off impurities unless the engine is run hard for 10-15 minutes. Also, if there is still antifreeze in the overflow bottle when the engine is cold, there is plenty in the system to keep things normal.

I still contend that an exhaust valve is 'stuck', meaning there are carbon deposits on the valve or valve seat which keep the valve from fully closing. This happens a lot when the cars are driven short distances in cooler weather at low rpm's. Don't blame your kids :)
I had my daughter drive the 2 miles to/from school in 1st gear just to get the engine oil hot. Besides, it was more fun to feather the throttle at 30mph while going over hills.

Klaus
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Proud owner of a 220S. If I had more room, I would have more Volvos.