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If your engine is similar to my son's '87 (I think it is), then your description sounds like the leak comes from the part which repositions the oil filter from its non-turbo mount point. It seals to the block with a largish O-ring, which can leak when it ages. A new O-ring is cheap from the Volvo dealer. Change the O-ring the next time you change your oil & filter. If this doesn't fix your problem you'll have to get a raplacement part. Look for a U-Pull foreign car junkyard.
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-- Bruce / '82 244 (315k miles!), '86 745, '87 760Ti, '94 854
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