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Whoa!!! Time for a new mechanic, preferably one who knows something about that engine like a (hmmm) Volvo technician.
I have yet to see a higher mileage 850 engine need rebuilding and his logic is just dead wrong.
Get another opinion on the oil leak just to be sure but there's no way in hell that just because a rear main seal leaks that you need ANYTHING more than that.
A rear main seal job on a turbo 850 is a 10 hour job by Chiltons/Motor time guide (what most shops everywhere use btw) and the trans is removed to replace a $20 seal, that's it, no more.
That engine will easily go over 200K with good care, probably alot more so you're being hosed.
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