If you have oil in the coolant tank then it's obviously the head gasket ... but I'd hate to rip my motor apart just for condensation in the oil. As has been mentioned previously, head gaskets on these motors don't often fail unless the car has overheated. Was that the opinion from a VOLVO tech, or just a generic mechanic? If the latter, I'd probably get a second -or third - opinion. From my recollections of posts over the years there are far more complaints of funny-looking oil especially in cars that aren't driven for long distances (enough to boil off the condensation) than there are blown head gaskets.

Try the brickboard search function if it's up and running.

Good luck!

-Sam