THANKS TO ALL!!
David, you and the rest of the guys were going in the correct direction. The Intermediate shaft WAS contacting the carrier back. What it turns out to have been was the new gasket was thinner than the one I took off (Usually it's the other way around, after years of being compressed)! Not sure of the exact thickness on the new one (opened and threw package out when it arrived early this week--and when I got the old one off I didn't compare them--like a dummy) however, today I went and purchased a roll of gasket material, carefully outlined as best I could the carrier. I used an old bolt to cut the new holes by holding the carrier in place over the new gasket, tapping/marking the spots, then moving the carrier and finishing the cutting routine on a firm surface. The new material says it is 1/32 thick, but sure does look thicker than that -- but it matches closer to what I took off -- wonder if previous owner did the same thing? Anyway, many, many thanks to all who took time to help me work through this odd problem. Now I only have 4 other Volvos to do in the next two months! ;-)
Randy
Cleveland, Ga.