I replaced engine and tranny mounts and the problem when going forward went away (most of the time). Problem when in reverse remains. It isn't noticable if creeping rearward but is very noticable when accelerating backwards. I noticed by watching the shift lever that the engine/tranny is moving forward and aft under acceleration and braking. When near the extreme of its movement the "vibration" recurs. I checked the new mounts to ensure they were still bolted in tight and they are, but it strikes me that maybe some of the rear axle bushings are worn allowing the entire driveline to shift fore and aft. Is this possible? Which bushings should I suspect? Are these hard to replace? I realize that the driveshaft center support bearing is also probably shot, should be replaced, and that might help some on the vibration, but it doesn't seem to me like that will arrest the fore and aft movement. Am I right?

Yes it can. The driveshaft may be a touch too long (poor design by Volvo) and, as it rotates, can take up all the slack in the system thereby banging into the tranny shaft, thus jostling the engine and attached components.

Have you shimmed UP the center carrier bearing? You can do that per Volvo's tech bulletin as much as 1/2". That usually takes care of the problem but in extreme cases the drive shaft needs to be shortened. See the info in the FAQ for the proper shimming procedures.

If the rubber carrier is shot and is hanging lower than designed, that too can take up slack and cause what you describe.

I can see where, theoretically, a small amount of movement in the rear suspension due to worn bushings could exacerbate the problem but I think that unlikely. It could just as easily be the engine/tranny being slightly out of position (rearward) after you tightened up the new mounts. Don't rule out u-joints either until you check them for stiffness. Be aware! If you dismantle the driveline, it was balanced as a complete unit so it must go back together the same way. That too has been discussed in the archives.

I suggest you check everything you can before spending cash on new suspension bushings, in my experience, from what you describe as symptoms, I think they are the least likely culprit.

When I disassembled my driveline ('94 960), the two shafts came apart by loosening a set screw and pulling apart the spline joint. It looked to me as if the overall length of the shaft could be adjusted by repositioning where the set screw contacted the inner half of the spline. Could this procedure be used to adjust the driveshaft length, as you suggested? Also, does anyone know how to determine the correct driveshaft length when tightening the set screw? I just put mine back where it was, but suspect there's a better way.