I'd highly advise getting a second opinion and I'd advise having it inspected by a Volvo master tech who knows that engine (not some "herman" at Jiffy lube).
In my many years as a Volvo master tech, I've NEVER seen one "white engine" leak coolant externally through a porous block as you're saying (not even on the early 960s as I've heard about for years).
It'd be worth spending the diagnostic time to have them pressure test it and double check your findings as if what you're saying is true, you'll need another engine which even used is costly and labor extensive.