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On a car with as many miles as yours has, I would replace the pinion seal. In my opinion, if you are going to be working in the area then it is a bonus.
Clean the dif. case, remove and change oil, and replace the pinion seal. A good time to switch over to synthetic gear oil.
The job is not to bad. It can be done in under an hour and requires no ultra special tools -however, that may depend upon your personal tool kit.
A good independent volvo shop, if you buy the seal, should only charge you for an hour of labor for that fix.
Do not buy a ScanTeck seal for that application! And, you are very fortunate to have discovered your problem before the dif. went south.
Peace & Love, Jon
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