My guess based on your description is that the spring mount is worn out on the passenger's side. The spring mount sits on top of the spring and fits into the strut mount. The strut mount is a bearing with the flat plate on top that bolts to the body of the car. Try turning the top nut and the shaft back and forth a little. If it turns easily on the passenger's side and with more difficulty on the driver's side, it indicates that the passenger side spring mount is coming apart. I don't think it's dangerous unless it affects steering, but it's not going to get any better. I don't think lubing the top will help; it might make it quieter temporarily. Tightening the nut might help if the nut has come loose, but it may be loosening in the components below it (spring mount etc). Some movement up and down at the top is (I think) normal but 1/2 inch seems excessive. If all the suspension components have 100K or more miles, they are due to be replaced. I should say that all my experience with V70/850 Volvos is with one car; some other forum members have lots more experience.
1998 Volvo V70 AWD 165000-R muffler, HD endlinks, boost gauge
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