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Regarding the key, assuming the key you have is an original, the head of a valet key is smaller than that of a regular (owner/full access) key. Of course, if its a copy on a non-Volvo blank you may not be able to tell.
Wasn't 83 during the era when they cheaped out and the only way to open the trunk was with the key? These cars had a round keyhole in the middle of the trunk lid, as opposed to the rectangular one on later models (like on a 7 series) that is also a latch button, and can be left unlocked, if desired. In either case, working the power locks back and forth a few times is worth a try.
A few years ago, I had a 78 Mercedes 240D. One day I went to unlock the trunk and found a similar situation to what you describe. In my case what had happened was that the little metal flap that keeps debris out of the key slot had broken loose and fallen down inside the cylinder. With considerable difficulty, using dental picks and the tweezers of a Swiss army knife, I was able to fish it out and the lock worked normally again.
Since you are parting out the car, there are a number of destructive methods to consider. If the trunk is full of parts, so what? Remove the back seat, chop out any braces that are in the way, unload all the goodies, and then you can crawl through and release the latch. Or, if you have an air chisel, cut away the quarter panel or the area where the license plate mounts to gain access to the mechanism. Finally, if you don't plan to keep the ignition switch (mechanical part) or the door locks, you might try driving the key all the way in with a hammer. Obviously, there is some risk the key will be damaged by this procedure, and no guarantee it will turn, even if it goes all the way in. Think outside the box and you should be able to save that trunk lid with no damage.
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