I don't know if you've solved this problem already, but I had the same problem with my 98 V70 - Code P0116. Mine was having the same problem, running cool and sometimes the cooling fan would run after I shut off the engine. I looked up the code in the Brickboard archives and found that the most likely cause was a stuck open thermostat. I changed it and since then, the engine warms up quickly and the temp is rock solid at the 3:00 position. I had the light reset and haven't seen the light come on again. It's a cheap easy fix, and the instructions are on Volvospeed Bay 13. I did not see a code for a faulty engine temp sensor, so I did not change it.