Although I haven't dealt with this issue, more than likely it's at the horn contact ring at the steering wheel being carboned up, grungy or possibly worn creating resistance that is lowering power going through the horns. Do start by making sure the fuse with the horn (#2? from the top) isn't worn on the ends or corroded.
You could try pulling the steering wheel and cleaning it up, but it will likely never be quite as loud as what you just got hooking the horns up directly to the battery and chassis ground.
Note that unlike many cars, Volvo horns do not use a relay (leastwise the RWDs). A simple solution that doesn't involve pulling the steering wheel might be to splice in a cheap 12v relay just above the horns. There is fused 12 volts on the yellow? wire at one of the horns (a doubled connector with a yellow and black wire). You could cut that yellow wire and use the hot side as the 12V feed into a relay with the control side of the relay grounded out through the black wire that goes to the steering wheel (you will have to identify which of the two black wires and cut it) then connect the switched side of the relay to the other end of the cut yellow wire to the horn and connect the cut black wire (non-powered side of the horns) directly to ground. If you can find yourself a 240 wiring diagram and understand the rudiments of relays and maybe have a meter handy then it shouldn't be that hard to figure out which black wire to cut and how to hook the cut ends up to the relay and chassis ground.
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Dave -still with 940's, prev 740/240/140/120 You'd think I'd have learned by now
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