Zee --

No need to adjust the sensor depth if you're reinstalling the same cover and sensor.

The only caution with the sensor is to be sure it doesn't hit the rotor (too close). If you're too far, nothing happens except maybe the speedo becomes flakey. A new gasket is likely to space it a bit further out, but not so much as to screw up the sensor.

The only thing to remember is to have a pan under it when you pop the cover. Last time I did mine (2 years ago) the cover popped off, gasket remained intact. I reinstalled it with the same gasket.

BTW, the older Volvos (and again, I don't put your or my '86 in that category just yet) have a tendency to rust pinholes through the stamped metal diff covers.

If you remove yours, scrub it out and scrape at the rust 'n crud on the outside. If you find a pinhole, you can solder it with plumbing solder using a propane torch. First, grind around the pinhole to expose fresh metal. Then clean, prime, and paint the outside to give you another 15 years of carefree driving (!!).