I looked at the owner's manual for 2004 and 2005. 2004 says ATF for PS fluid, which doesn't sound right. The 2005: Volvo synthetic power steering fluid (Pentosin CHF 11S) P/N 1161529 or equivalent.

So check the bottle of green fluid and see if it is Pentosin. If it is, you may NOT use a stop leak product!

Call your dealer and ask which is the correct fluid for your car, VIN may be needed as Volvo tends to make changes during the year. The two fluids are not compatible. If you flushed your system with Pentosin when it is expecting ATF, it will leak. The molecules are smaller.

Inspecting the PS rack should be done on a lift. When was the last time you took the car in to an alignment shop? They will be happy to check for you, it is part of the alignment process and much cheaper than a dealer. Just don't agree to replace the rack.


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Keeping it running is better than buying new

It's worth a try to get a turkey baster and empty out all of the old
PS fluid that you can, and try the Lucas stuff along with new PS fluid.
It can swell old seals to stop some leaks. It isn't a sure fire fix,
but If you read the fine print, I think that they will reimburse you if it doesn't work, so save the sales slip and the packaging.

I bought a used 740 that "needed a rack and pinion" for a bad leak.
After cleaning all the crud from there it turned out that one of the PS
lines was leaking with a tiny pinhead leak, so I just needed to replace
a single hydraulic line instead of the rack. This was a fast leak and not one caused by a worn seal that would usually be a slow leaker.

Bill