Just a few comments Will. Your suspicions about the shop are well founded. Not to say that your head may need those things (valve guides, etc.) but that's rarely the case. I've worked on hundreds of red blocks and the thing that is most impressive to me is the longevity of the cylinder heads (other than the abuse of severe overheating). Bottom ends can last indefinitely with regular oil changes. I've seen motors with 250-300K that check well within wear specs on the bearings. If you have the pan off you can plasti-gage the clearance of the mains and rods. The machinist we used would do what he called "micro-finishing" all components to determine wear, measuring everything. He said if you could feel scratches in the crankshaft with your fingernail you need to machine the crank. Otherwise, depending on the plastigage test and micro-finishing measurements, only new bearings are needed.
A ring compressor tool is not an expensive item and surely there must be a Volvo fan near you who has one that can be borrowed or rented. Likewise a "ball" type honing tool is not expensive and easy to use as long as the cylinders measure OK.
Entire red block motors are easy to find and cheap. I had a good motor in one of my '89 245 parts cars and advertised it for 2 years but couldn't give it away. Recently, someone with a 245 who burned up his differential came by. I worked it out to tow my car to Brooklyn from my mid Long Island location for a good price and got the car out of my driveway. For the $600 I think you can buy new rings, bearings, gaskets, etc. - do the work yourself for the satisfaction and know what you've got. -- Dave