The little 'muffler' is to absorb rapid changes in pressure inside the lines of your A/C. Leave it alone and REPLACE both hoses, the receiver drier and the orifice tube. You might want to pay extra for a VOV, variable orifice valve. Cools better in hot climates(soon all climates what with global climate change).
Fill with the correct amount of PAG oil (4 oz or so), add 3 cans (12oz each) of R134 and you are good to go.
The compressor is out of alignment probably due to worn rubber bushings. Replace with POLYURETHANE. Be sure that BOTH locking down bolts (front and back) are locked down...most non-volvo technicians only lock down the front one and what you are seeing with your compressor alignment is the result.
I just did both my wife's 89 and my 86 and I'm afraid of getting pneumonia, it's so cold inside, especially on a highway!
Good luck,
el raidman