Hi GP-
I ran into a real similar problem in an 88 245, same kind of scenario. Turned out the small wire had broken at the alternator, and I think was grounding out. The guy's alternator had previously fallen off due to a loose bolt, and had been put back on but the harness here was not fixed.
The wires go through a tight spot between the alt bottom bracket and the block. Look for damage here, along the wiring harness in the two clamps under the crank pulley, and right on the back of the alternator. Make sure alt ground wire (blue wire usually has a red Volvo part ID tag on it) is in good shape while in there. The space is a bit tight, up against the oil filter and right motor mount, I know.
Look at the 8 pin grey connector on the firewall. The red wire here is that same small red wire on the regulator connection on the alternator. Is it bare or crumbly? The harnesses usually show problems here. If that's the case, try to disturb it as little as possible. On most of these cars that I've owned, I've re-routed the red wire and the oil pressure switch wire around the right side of the engine compartment, along the firewall and through the strut tower and down to the alternator. This works well and Volvo should have done it like this- would have saved thousands of tows and repairs for owners over the years. Requires one splice up at the grey connector for each wire rerouted.
I know you said you checked timing, but make sure also that the dist rotor is pointing to the tick mark when it's at TDC. You're clear on the location of all the timing marks I assume so I won't explain how to read those.
Another good test, and the most common problem with these cars most likely, is a failure of the fuel pump relay. I know you said it's getting fuel, but just make sure by trying another relay. Location is under dash, right side, firewall in front of glovebox. Relay PN 3523608.
And try to check out the cat and exhaust for damage. If it took a really hard shot, it's possible the exhaust is crushed somewhere allowing no flow out, and that would possibly prevent starting.
Good luck with it!
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::: Rob Bareiss, New London CT ::: 92 244 ::: 90 745GL ::: 90 745T ::: 84 242DL ::: 90 745T Parts ::: Used to have : 86 244DL, 87 244DL, 91 244, 88 244GL, 88 744GLE, 82 245T, 86 244DL, 87 244DL, 88 245DL, 89 244DL!
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