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Hello fellows: I too had a problem with my 1999 V70 XC. Sorry that I'm using metric volumes, but I know you will get the jist of my gas gauge/capicity problems.
Although my symptoms were different, it does seem to confirm there are problems with the gas gauge. My suggestion is to not rely on the computer's estimate and to fill up when the needle first enters the red on the gauge's scale.
On the first fillup, my V70 XC took 65 liters and the service manual states the capacity of the V70 as 66 litres. In my case, the gas gauge said 1/4 full. I thought there was a problem and had the dealership replace both sending units. Yes, there are 2 tank sending units on the '99 XC, since the gas tank is like a saddle bag, straddling the driveshaft. The single inspection hole, under the cargo carpet is for the non-AWD model, hence in the center. The dealership had to drop the rear axle and this was a 9 hour job - thank goodness it was under warranty.
When they reinstalled everything, the gas gauge was even more off. It appears there are 2 black wires (going to the sending units) and the mechanic reversed these. Once the wires were switched, there was no difference from the first problem. I decided to run the XC until almost empty; the reserve light did come on. To our surprise, there was still 10 liters of gasoline in the seemingly empty tanks. We refilled the car with the 10 liters and I went immediately to a service station and pumped in 70 liters.
I was going to Sweden that summer and wanted Volvo headquarters to comment on my problems, but they declined asking Volvo Canada to come up with an answer. Of course, they didn't even try to find an explaination, even after I showed them the capacity was greater than the manual stated.
In the 2001 XC service manual, it does state that an AWD V70 can hold more (or less) fuel than the service manual states, so this was Volvo's way of confirming my assumptions.
Good luck with future fillups.
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Cam a.k.a. CVOLVO.COM
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