Thank you for the response. Just a few points:
1.I did have "Ck. Engine" light come on a few months ago, along w/ the "Emissions ..." message. Which I got once before due to faulty gas tank sensor or cap. I thought it was going to be the same problem again. I waited for the 45k service to have them reset that message (or so I hoped).
2. The warranty is from Volvo and came from the volvo dealer with the S80 which was a Certified Preowned, it is called Volvo Certified Limited Warranty. The sensor is not listed as a covered component.
3. In my state (NY) they have to receive prior approval, which they did not.
I guess burdon is on them as I have the car, new sensor and I did not pay for it. I'm not about to bring it in again for them to remove the sensor, I doubt they want to spend time ($$) on removing it and replacing it with what? The old one was not returned. Also, I don't trust them and would not allow them to get near my car at this point anyway. So, I figure the dealer for once (!!!) gets the shaft, especially as they are totally in the wrong and tried to put one over on me. Per my lawyer they would lose easy in small claims court.