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There isn't a PVC valve in the engine. There IS a flame trap, located between #s 3 and 4 intake, unless that's what you're talking about.
If you haven't cleaned that flame trap out, it should be a plastic screen with a bunch of holes in it, or a metal screen of similar function. You should be able to blow through it with little effort. Also important is to clean out the vacuum line (the small one) that goes to the intake manifold.
Check up on that and THEN get back to us. If the flame trap is blocked like several I've seen, you will get oil from every possible place in the engine.
Also, using a good oil like Castrol will keep sludge and baked deposits out of the PCV system.
As a rule, Volvo engines don't fail that way (they barely fail unless you really TRY). But they do succumb to PCV blockage. That white vacuum valve on top of the engine is not a PCV system piece, so don't mess with it.
As far as the Check Engine light goes, see the 700/900 FAQ section of this site. There are excellent instructions about how to deal with that.
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chris herbst, five volvos.
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