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I'm quite sure that there's a service bulletin on this matter. What I recall reading is about a supplemental clamp or clip that secures the hydraulic line to the slave cylinder. It covered vehicles earlier than my '99 model, including (I think) the early 850. I saw this in All-Data, when I had a subscription -- mine's now expired, so I can't look it up for you until I renew.
But the fix seemed very fast, easy and CHEAP. It would probably be worth your while to get a subscription to All-Data for $25 just to have a look at that service bulletin. Search for text "decrease in clutch efficiency" or something to that effect.
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Jim Rothe, '99 S70 T5M, http://www.jimrothe.com/volvo/index.html
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