You can buy the part online for half that price, just like you can with just about every other part for these cars. I gave up buyijng anything but really specialty stuff from the dealer, and NAPA and Autozone:

1. Are also rip-offs
2. Usually only carry crap or generic junk

Go to http://www.importeccatalog.com, enter your car's info, go to "engine electrical", and the part you need is labeled as "reference sensor". They sell it for $34.86, and yes it is totally legit and reputable (I use them all the time and just ordered my rebuilt Dist. from them). Bougicord is the company that produces the Volvo part in question... they also make the plug wires.

Oh, and if that isn't enough shipping is free over $50 and you only pay taxes if you live in Texas. :)

You can also find lots of other sources for parts online, including all the following sites:

http://www.alloemvolvoparts.com
http://www.fcpgroton.com
http://www.vlvworld.com (lots of used parts, body and cabin stuff too)

good luck,
rt