If you end up getting a newer Volvo, focus on the 2003+ models. By all reports they are pretty good cars.

Sounds like your 98 V70 is just going through a rough patch here. Could be a lemon, but I doubt it. From what I've learned, the 95-97 850's and the 98 V70's are supposedly some of the best cars Volvo ever built. They are certainly more complex than 240's but still simple compared to modern cars. FWIW - I owned a 90 244DL for 11 years and sold it at 300k. The drivetrain was bulletproof other than engine and tranny leaks but it had far more other problems than my 95 855GLT has had to this point. My 850 now is approaching 235k, has no leaks and runs great...:)