You have to remove the timing belt and then you have access to it. Look here under "850 major mx" or whatever is stickied at the top of this forum or Volvospeed.com's mx section.
Once you get the timing belt off it's self explaintory to r&r the water pump. Take bolts off, take pump off and scrape off the remaining gasket left on the block, put permatex gasket adhesive on the new pump along with the new paper gasket, and install. Then put the timing belt back (or replace). Done!
How many miles on your 850? When was the Timing Belt last replaced? How about the tensioner, the tensioner pulley and roller? Depending (you're taking your T.B. off anyway) it might be prudent to go ahead and do these replacements.
'98 S70 T5 Emrld Grn Met/Beige Tons of Upgrades Mobil-1 '04 V70 2.5T Red/Taupe Some Upgrades Mobil-1 94 850 Sedan NA Drk Blue/Tan '00 V40 Purple/Grey Mobil-1
The OEM gaskets go on dry but I use a thin coat of RTV just to keep things in place when I have replaced the two that I have done.
I don't know how bad of a thing that will be the next time I need to change the pump again but I figure that that will be another 140k or so so I don't lose a lot of sleep over it. With the old gaskets scraped off and the RTV it does not leak.
I followed Lee's instructions when I replaced my water pump recently. I used a very small amount of RTV so it acted more like a tack – that worked well to make sure the paper gasket was on and stayed in place. I applied it to the engine first, then the put the gasket on the engine. That gave me a good visual inspection of fit and placement. Then a small amount on the water pump and that was put in place.
By far the more difficult task was getting all the old gasket off. I used a razor blade and some scotch bright to make sure the surface was completely clean and all the old gasket material was off.