I've got the same car and engine/trans. Bought it as-is, so I don't have the experience of actually building everything, but the LT-1 drove the original tach via a processed signal from the PCM (GM's term for the computer).

My car has an MSD tach adapter 'black box' to send the ignition signal to the Volvo tach, and a tiny potentiometer neatly tucked in a corner of the cluster which I can turn with a fingernail to calibrate the tach to my automotive DMM tach reading. This probably accomplishes the same thing as Volvord's 100-ohm resistor, but can be dialled in for better accuracy.

My engine's ignition has been converted such that the dreaded "Optispark" distributor now only provides the high and low resolution primary timing signals to the PCM. Secondary voltage to the plugs is via a quartet of Cadillac Northstar dual coils. Nice system: quick starts, smooth running and 26 MP(US)G at a steady 70 on the hwy. 9.0L/100km for our metric friends.

Power? well, as Rolls Royce say, it's "adequate", and plenty to embarass the kids in their ricers, and the yuppies in the 3-series BMW's and A4 Audi's.
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Bob (son's 81-244GL B21F/M46, dtr's 83-244DL B23F/M46, my 94-944 B230FD and 89 745 (LT-1 V8); hobbycar 77 MGB, and a few old motorcycles)