A tip of my hat to Farrell Volvo in Southboro MA.
Even though I didn't ahve and appointment, they diagnosed teh issue and got both rear wheel hub/bearing assemblies replaced on Monday.

Covered the replacement under warranty (Appropriate).

I am in the same boat and have just found a Volvo Service Bulleting indicating that this is known and common problem in 2003-2007 XC90's. Tell your Service Mgr about bulleting: TNN-77-16-2006-04-21. I don't kow the terms of the repair but it covers Loud/Failed Rear Wheel Bearings and indicates they ...

Hi Everyone;
I'm new to this site and have already found ton's of good content.

I found the site as I am experiencing this problem with my '98 S70 GLT (with ~97k miles). The last post is from 2006, Has there been any update since then ?

Thanks for the info !