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This is a serious deficiency in the 1996 850's (where it could be one of three problems) and the 1998 70's (where it's almost always the control module).
In 1998, the encapsulated pc board cracks, breaking solder connections. An OBD scan usually returns a code for a sensor failure at the RR wheel - so this I expect is the circuit that is affected by the module failure. First, eliminate the possibility of faulty ignition switch interaction, which can also turn on the caution lights (jiggle the key before and after startup to see if the lights go off).
The module is located under the ABS block in the engine compartment, and costs $358 internet, $416 dealer. If you're good with tools, it's a DIY job; Volvo is looking to get the failed part back so there may also be a temporary core charge now. Dealers quote wildly erratic prices for making the repair - usually about $500, part included, but brickboarders have reported quotes high as $1000!
As francisira suggests, PLEASE REPORT IT TO THE NHTSA so they can see how extensive the problem is. Do it online at http://www.nhtsa.dot.gov/cars/problems/ivoq/default.htm.
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David \\ (98 S70 T5SE Black, misc mods (mostly lighting), red calipers) (92 940GLE)
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