I have been told by the local Volvo dealer that my steering rack needs to be replaced. He estimates the cost to be about $800.00(Can$). Is there anything I can look for that validates their diagnosis, and if the rack really needs to be replaced, what should it cost?

I just replaced my rack along with tie rod ends and ball joints. Parts were under $450.00 with the shipping. It was an all day job and extremely greasy mess. With shop rates in the $60 to $75 dollar range the quoted price isn't abnormally high if the technician is giving you a new, not rebuilt, rack.

I replaced mine because when the temps dropped to the -0F mark the steering became excessively difficult. If you are loosing fluid through the rack, or having difficulty with steering, and it's not the tie rod ends or ball joints, then try flushing the system before you change the rack. A flush is inexpensive and simple enough that you can do it in an hour or two.

Also, try looking in the FAQ's for 700/900 for more hints and tips.

I have operated a number of cars (both Volvo and GM) using Mobil 1 Synthetic ATF as the power steering fluid and I have yet to have to replace a rack. In some cases these cars have 200k miles. Flush the fluid per FAQ instructions and replace with the synthetic. Place a magnet in the reservoir for a couple of months to remove residual crap. Then just inspect it once in a while. It is never black, never contaminated, never dirty. Amazing stuff.

No this is right in line with what you spent. CDN $ is only what? 65 cents US? Less? A new rack from Volvo lists at $1700. That's big ugly US dollars, too.

I think all 740's do this as they age. It was so common we called it "740 morning sickness".... it'll go like that a long time as long as it never runs out of PS fluid.
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Rob Bareiss, New London CT ::: 86 244DL, 87 244DL, 88 744GLE, 91 244: 808K total

Mine is really stiff when the car is cold too. It's fine once it's warms up though so it hasnt really gotten on my nerves too much yet. I'll get around to replacing it one day. Maybe I'll find a nice one in the junkyard.
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'91 Volvo 740 wagon. A big comfy box.... and a '90 Mazda 626 GT turbo. Heavily modded, really fast.