Ask them to let you be present when the head comes off - take pictures and get a written explanation why the head gasket failed.
Perhaps you can be present during the entire process, and see if any head bolts are loose or broken before the removal of the head. Did they use new bolts for the ring job? They should have some paperwork for the job, showing what parts they used.
BTW did Volvo have their lifetime warranty on parts at that time?
After that, you might take your case to Volvo of North America.
I had luck with VNA on an exhaust system on our '95 854 -after their prodding, my dealer installed a second. new system that did not fit. We laid both systems on the floor, then they heated up one and bent it to fit. Both had rubbed on the left rear tire. The service manager took photos and told me that VNA would be told about the problem.
Our '95 854 blew a head gasket at 97k miles. When the head was removed, some of the head gasket could not be found. They thought that it had corroded away.
I agree with the other poster, there are no minor head leaks inside the engine - outside maybe.
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