This has been done by Swedes many times. When I went to the new S40 drive event this past spring I spent a few minutes talking with one of the younger Volvo engineers and he described taking the 305 V8 (300 hp) out of Paul Neumans '96 965 and replacing it with a 485 hp IL6 24v B6304S (stock 960 motor) with twin T5 turbos (much bigger than the S80's).
The cylinders are built to withstand diesel compression ratios, as are the 5 cyl engines, all made with the same single unit cast aluminum block per cylinder, sleeved,bolted and epoxied together to form 4/5/6 cyl unit engine blocks. The motor can easily withstand high pressure turbo compression.
The 960 apparently is THE car to modify for the Swedish Volvo enthusiast.
Before I traded in my '96 960 I contemplated doing this conversion. It will take a donor S80 T6 intake manifold and turbo set-up along with an ECU and intercooler and piping/airbox.
I believe there's a pictorial of a 960 T6 on swedespeed.com
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'89 245 Sportwagon, '04 V70 2.5T Sportwagon