I had a 1958 444 that I placed a Buick 3.3 liter V6 coupled to a 700r4 automatic. The car would run from 0 to 60 in seven seconds flat. It had a narrowed down Ford Ranger rear end. And YES you do need to convert to disk brakes in the front or the car can get very dangerous trying to stop. My only mistake was using the 3.3 engins as it was made for a FWD car and had some balance problems due to torque converter mis-match. The transmission came from a Chevy S-10 pick-up. I should have used the 2.8 liter from a S-10 to keep the match correct. I have seen small block Ford V8's in them also but the v6 is more than enough for the Volvo. If you go to Volvoadventures.com and look under "members cars" , then under PV444V6 you will see the car along with some photos during build up. I had a California car to start with and it had NO RUST, floors were very solid. This is something you might also take into consideration as you need a strong body to hold it. I did everything myself but I can imagine the expense if you had to have a lot of the work done for you. It's a neet car when done and will run down the road at 85 (typical freeway spped here in the Detroit area) with the best of them and realy supprised a LOT of people at the light.
Good Luck with your car no matter which way you go.
Dennis