Hi there,
yes it's a problem I had on my '98 S70 T5, and my 96 850 wgn (non turbo).
The check valve lets moisture from the combustion chamber through to the air pump, which slowly fills with water. The air pump relay is located adjacent to the airpump, and itself is prone to water getting in. Both are accessed by removing the battery and battery tray. The check valve is the little silver piece on the top rear side of the enginge, pretty near the top engine mount. All the parts (new valve, relay and airpump) are avaialable for about $300 from somewhere like VolvoWorld or one of the original Volvo parts dealers on the web. You might not need the pump.
Beware if they say it's a "recurring" problem, as an unnamed dealer local to here just cleans up the relay and valve, then sets you on the road for a few more months with a $600 repair bill, only to claim "you must have driven through water" when it fails again.
It's an easy fix, 2 hours tops on your own if you have a few wrenches and screwdrivers,
good luck!
Ashley