Question: I have a 91 940 SE (w/nivomat) which needs to be replaced. The 96 960 sedans have the same set up, but do not use Nivomat. Does anyone know if the shocks/springs from 960 will replace the 91 nivomat? or do i have to go to IPD and pay the outrageous price?

The 96 960 has a completely different independent rear suspension using transverse leaf springs.

Correct, still doable if your suspension has the transverse leaf, but your cost of new Nivomats wiil pale by comparison. It's more likely that you have the suspension setup like the 92-94 960, as I suspect, and the conversion will be much easier. Look at FPC Grotton for comparison pricing. I happen to love the Nivos despite their price, especially on a wagon. Not sure what mileage you have on your car, but a new set of Nivos (lifetime warranty) could be the last rear shocks you need.

BTW, there are spme specific tests to see whether your nivos have failed, but of course a leaking cylnder and poor ride are the best indicators. Age alone may not be a factor.
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John Shatzer, '97 V90 @ 105K

the back end drops about 4 inches over night, that's why im guessing they are failing.

That could be considered normal wear but not the end of life. If the back end comes back up after a "few bumps down" the street and there is no leaking they are still serviceable.
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'96 965 with 16' wheels at 121K. Had '85 745 Turbo Diesel for 200K.