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Call the guys at volvosaabparts.com - Their number is 800-700-8658. Like someone mentioned, the dealer wants $170 for a new latch mechanism. These guys will sell you one for $65 plus shipping. It't not brand new, but it works!
I had the exact same problem you do. My tailgate latch rattled like crazy. Every bump I hit made it sound like I was driving a piece of crap!
The two "plates" on the latch are held together with rivets, and my rivets had worn out causing the two plates to rattle against each other - and also causing the tailgate to not be SNUGLY secured to the car when closed.
After I replaced the latch, the car sounds solid, baby. I definitely recommend doing this, you'll be so much happier...I am. It's pretty easy to do...failry self explanatory once you get started.
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