It seems that you have a nicked or crimped wire somewhere in the path. I ended up rewiring the plug on mine to eliminate the "dipped beam failure". Good luck.

Turns out a Volvo mechanic said the compressor was dead. We sourced a used compressor and the A/C is functioning as designed now. Hopefully this compressor will last for at least 2 - 3 years and I won't have to think about this anymore. Good luck to everyone else.

I'm going to tag onto this one as well. We just bought a 2001 S80 (non-turbo) and are having the same symptoms. AC works on initial use, for about 20 minutes and then starts blowing warm air. I'm noticing that the temperature gauge is straight in the middle. Not sure if this is normal or if it's par...