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When the engine overheated, how high did the needle rise? Did it just barely touch the bottom edge of the 'red' zone, halfway into it, or at the top?
If it only touched the bottom of the overheat section of the gauge, your head is probably ok. However, as it climbs past that, the chances increase that you will have a warped head. Since the Red-Block engines found in our 240 Volvos use an Iron block and an Aluminum head, the expansion rates of the metals are different. At overheat temperatures, the expanding head will literally push against the end head bolts (at cylinders 1 and 4) and warp itself, bowing upwards. This will cause a loss of compression, head gasket failure, and an expensive repair bill to have the head machined (assuming it is still within correctable tolerances). Before you chastise Volvo for using an aluminum head, they chose it with a reason. Valve temperatures are greatly reduced by the thermal conduction properties of the Aluminum head, and given proper cooling system maintenance; the head should last as long as the block.
I'm not saying that your head is warped, but the possibility exists. Aside from a possible mechanical failure of the climate control system, the fact that your heater wouldn't get warm is a sign of VERY low engine coolant and I bet you had to put in about a gallon or more. If there wasn't any coolant circulating to the heater, I would bet that there wasn't much in the engine block or the head.
At this point, I would strongly advise performing a compression test on all 4 cylinders. Also look for a green hue on the ceramic insulators of your spark plugs (indicates a coolant leak into that cylinder). Worst case, if the head is warped, you can either swap it for a junkyard special ($25-$50) or have the head surface planed at a machine shop (assuming it's still within correctable warp limits, check the Volvo green manual for those numbers). Hopefully, it may just be a bad head gasket... Don't give up on the car yet, -if it's too cold to work on it and you have other transportation, postpone the work until spring.
Regarding the low oil pressure issue, what weight oil are you running? If you're using 5w30 or 10w30, they have been known to sometimes allow the oil pressure light to flicker at idle speed (in a hot engine). What condition is your turbo in? Are you loosing large amounts of oil around the bearing (lots of oil in the tube between the turbo and the throttle body, some is normal, but a lot is not). Have you noticed unusual oil consumption?
God bless,
Fitz Fitzgerald.
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'87 Blue 245, NA 230K
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