I have a feeling you are getting two problems combined. First of all, the front anti-sway bar from iPd is notorious for squeaks and squaks. Try lubing the polyurethane bushings between the bar and the chassis with a good lube that won't damage the polyurethane. Next, the binding sound you describe sounds ENTIRELY like an strut/anti-sway bar linkage failure. These are notorious on the 850 and _70's on the same chassis. They seem to chew through these at a ridiculous rate, and Volvo is on it's 3rd or 4th redesign of the part already. Thankfully, the newest one is about half the price of the original, and from what I've heard, is the best yet. When this part is on the verge of catastrophic failure, it has been known to produce a binding sound WAY louder then one would think such a small part would cause.

The new linkage is about $40 Candian, and a can of good lube is about $3-5, so this problem which probably sounds very expensive, really isn't. With a jack and common tools, you could be done in one hour.