I recently found the following recap of a thread from alt.autos.volvo. A Google or brickboard search might yield additional info. (You have the "Volvo/Chrysler" Ignition.)

>>Message-ID:
Date: Tue, 2 Apr 2002 21:17:34 -0500
From: "volvo------"
Newsgroups: alt.autos.volvo
Subject: Re: 240 DL can't pass smog

Any 240 that has the Chrysler ignition box will pass NOx with flying colors, provided the cat is at all sound and the ignition secondary is in reasonable condition, when the vacuum hose to the control unit transducer is plugged.

On the dyno and on the street, unless you're really flogging it, you can tell no difference in performance. What happens is that the "limp home mode" for the Chrysler box closely matches a conventional distributor curve; i.e.advance retards 5 degrees when the throttle is opened and climbs with engine rpm to approximately 33 degrees instead of swinging immediately to 52 degrees and backing down to below ping levels.

It's this high sustained advance on the verge of ping that drives NOx high. Typically in this area the NOx reading is just a few points over the allowed limit, and after replacing the converter in drops to just a few points under the limit. But with the transducer hose plugged, you can expect to see a drop of over 400 points on an old converter and as much as 700 points on a new converter.

There was a recall on the 83-84 models to install a vacuum delay valve in the distributor hose (to cancel the retard off idle) and a delay valve in the transducer line from before the throttle (instead of manifold vacuum) to delay the advance curve to quell high NOx readings and satisfy the EPA. I rarely see one of those cars that still has that particular modification intact. There were serious performance issues even on cars in a good state of tune.

By disabling the transducer you gain all the dwell extension features of the lean burn system without sacrificing the marginal at best mpg gains that were so highly touted at the system's inception.

If there were some valid reason to not do this I wouldn't recommend it, however NOx is the most potent pollutant, after ozone, in producing smog in cities and valleys. NOx at high altitudes, according to NASA studies in Hawaii, is more of a destructive catalyst in O3 reduction to O2 than even Cl2F2H (Freon R-12).

Sorry about the rant, I just hate to see people drop 200-300 bucks every two years on a cat that doing it's job extremely well. It's so hard to scrub NOx that one might as well reduce it beforehand in the combustion process if it is at all possible. Air is already 80% Nitrogen so it's impossible to not burn some in an explosion, but if one can keep the temps below the threshold formation value, then why not?<<

Maybe your mechanic would at least give this a try???
--
Bruce Young
'93 940-NA (current) — 240s (one V8) — 140s — 122s — since '63.