Thanks for all your input.
I have avoided the problem by today buying a very nice '00 V70 FWD with 358,000 km on it.
As I read your responses, it would seem to me that the AWD system is not simply a simple mechanical arrangement of 3 differentials, which would pose none of the issues mentioned, but its a system that actively interferes with the traction using limited slip clutches or whatever.
Incidentally, I talked to the local Volvo dealership mechanics, who also told me the same, but said they had never encountered broken bevel gears, just the seals.

Now to try and sell my '92 740....