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I suspect that you can obtain a used S80 motor for a lot less than $12,000. Also, if you had a "head crash" it still shouldn't cost $12,000 to fix.
In any case I don't really understand how one cold break the engine block by breaking the serpentine belt. I can understand that a broken serpentine belt could take out the timing belt cover and timing belt and cause a head crash, though. (That's been reported here before. See http://www.brickboard.com/AWD/?id=138793) Has an indy Volvo mechanic been consulted? They are absolutely essenial for keeping these cars running at a reasonable cost once the warranty expires.
As I read the 2001 Volvo S80 maintainance schedule on the Volvo website, it says "I" (="inspect") the serpentine belt at 60,000 miles and "R" (="replace") the timing belt and belt tensioner at 105,000 miles.
-Punxsutawney Phil
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