Since you mention the car started smoking suddenly and that there is in-and-out (shaft) play on the turbo, I'm more inclined think that the turbo has failed (seals and/or bearings) than a worn engine. I put an allegedly rebuilt turbo on my 1994 850 wagon. Ten days later I had oil all over the unders...

IPD sells a kit (or used to, I couldn't locate it today) but you can find these on eBay or elsewhere on the web by searching something like 'Volvo tailgate repair' or etc. A previous owner installed one of these kits on my 850 wagon but I was unimpressed: the sheetmetal gussets that you screw on are...

It might help if you can tell us what the other ends of the red and blue hoses are connected to. (They look like aftermarket upgrades so color alone won't give a clue.)

I also have a '94 850 t% but unfortunately don't remember ever seeing the metal box in Pic #3.

I agree with the others: blue smoke upon cold start after sitting sounds like valve seals (oil leaks through into the cylinders as the car sits, then burns off when you start it.) A good PCV system check is to remove the oil filler cap and rubber-band a latex glove over the opening: At idle the glov...

When doing the PCV system, make sure the PTC nipple isn't clogged too or the car will continue to build pressure.

Since you mentioned new: if you haven't already checked, go to ipdusa.com (or click IPD link atop page) and search for part #112658 (3" downpipe only) or #114199 (3" downpipe & sport exhaust). Neither option is cheap but I understand that they are well-made parts.

How was the transmission fluid level? Both times when the underside of my 850 Turbo (A/T) was wet with transmission fluid, I found that someone had grossly overfilled it. When this happens, for some reason it seems to come from the passenger CV seal. I replaced that seal twice - once with Volvo OEM ...

Some thoughts: 1) Double-check the vacuum line from the PTC. My 1994 850 Turbo has (I believe) a different PTC hose set-up than your V70, but I had a similar problem: dipstick smoke after PCV replacement until I connected the PTC to a strong vacuum source. My car sucks in a glove until I disconnect ...

Based on the picture and measurements, I am guessing you need an M8 size (5/16" is roughly 8mm) with coarse (1.25?) thread pitch. I recently lucked out and matched up a metric coarse thread in the specialty license plate bolt bin at my local Ace Hardware. I recommend bringing one of your bolts ...

Ozark Lee wrote: The 1994 non turbo cars usually have the Jetronic LH 3.2 system that has two modules, one for fuel and one for ignition. The codes are read from both port A-2 and Port A-6 on the on board diagnostics.
...Lee

Thanks for the correction: I sometimes forget some of the N/A vs. turbo differences!