That was a good question. My daughter just bought an S60 ('07) and because she's 3000 mi away, I bought myself my own copy of her owners manual to refer to in case she calls with a question (I told her to read her manual, but she's a new lawyer and too busy to read 236 pages of a manual that won't generate billable hours -- it's easier just to call her Dad).

Anyway, I went through the whole manual and there was no mention of any backup mechanism -- I expected that there would be a place in the trunk where a hand crank (e.g., from the tool kit) could turn a gear to pull on the cables and close it? I seem to remember that some car I used to own had that feature, but maybe I'm just getting senile.

The problem was the sunroof control module.

Got the module today, put it in and the sunroof closed with no problems.

The root cause of the water might have come from the side aprons of the sunroof. My right apron has come undone and water might have been able to leak in through there.