Replace the wires one at a time, selecting their own route rather than that determined by the harness.

Slice open the harness. You may find that there are still decent lengths of good wire inside that you can use on shorter more direct runs.

The gray plug on the firewall above the engine has plates on the side that can be popped off to give you access to the individual wires. If you are unable to find replacement terminals (supposedly available at Volvo for about $.50 each) you can cut and crimp using blue butt connectors which fit over the silicone plug.

Run the oil (blk) and alternator (red) wires along the fender instead.

I ran the wires through teflon tubing for protection and bundled them with zip ties. Vinyl hose from a hardware store is also good protection.

Put aside a leisurely 2 hours for the job.
--
1980 245 Canadian B21A with SU carb but electronic ignition and M46 trans in Brampton, Ont.