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You seem to be asking about two separate parts.
I'll assume you're dealing with a 1998-2000 V70 AWD or V70 XC.
There is a part called a viscous coupler or viscous clutch. This unit is mounted in line with the center driveshaft, just fore of the rear differential, inside the driveshaft tunnel approx between the rear passengers. It cannot be repaired and must be replaced if malfunctioning. The fluid is sealed in there permanently. If this thing is leaking, it's fubar'd 100%. That said, the only malfunctions we seem to hear about are pretty mild - the center driveshaft will shudder/shake in low speed tight corners (in a parking lot) when the fluid in the viscous clutch is warm. I'm sure there are more severe modes of failure but this seems to be the most common, and most of us are living with it as is. I'd be very cautious of dealing with a mechanic who thinks he can repair this part.
There is another part called the rear differential which is an angle gear mounted between the two rear wheels. The fluid in this unit can be replaced and it can be fitted with a new gasket in the case of a leak. FWIW I've never heard of a rear diff leaking on one of these cars and most people simply leave them without any maintenance whatsoever for the full lifetime of the car without problem. (though many of us do a fluid replacement too :) )
Please get a straight answer from your mechanic on these things before shelling out for anything.
If the VC is indeed ruined, the center driveshaft may be wrecked too.
If you need to replace either of these I would recommend getting used parts from Erie Volvo. Don't talk to the dealer as you'll pay a few thousand dollars for each I'd expect.
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1998 V70 AWD Turbo 190k+
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