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There's a really nice tool for doing this job that eliminates the need to remove the rear housing. It's a special puller that costs about $80. I think IPD sells it. It's basically a bunch of skinny fingers that can slip under the bushing, then a reinforcing ring that's shoved under the fingers to lock them out against the ID of the bushing. A long puller bolt threads through the center to pull the whole thing out. It's a relatively new invention for this job and it works GREAT. I just used one at my friend's shop the other day to do a tailshaft bushing/seal on my 87.
You're right, the seal goes bad because the bushing goes bad. Replacing just the seal may work for a bit, but it will leak again soon. Any Volvo shop should have this tool - you may find it's worth it to have them do the work, since it's under an hour with this tool. Nothing gets pressed, no taking apart the transmission. Just unbolt the driveshaft and pull the bushing. Nice and simple.
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Rob Bareiss, New London CT ::: 86 244DL, 87 244DL, 88 744GLE, 91 244: 808K total
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