My '98 V70 AWD, the same car as yours, developed a gas leak when new, during the first months of ownership. It was a defective expansion tank which sits atop the main tank. There were several of us with this defect that posted here and on the usenet group alt.autos.volvo. About two weeks after the postings, while my car was in the dealer getting repaired (it took a week to get the part from Europe), I got a telephone call in my office from an investigator with NHTSA. He asked all kind of questions and wanted the part itself. He stated that they routinely read these boards and newsgroups and was gathering info to be used in determining if there should be any action (like a recall order). There was no recall, but more people like you need to post their complaint on the NHTSA website. There has been a problem with these plastic tanks in the past. If yours is the same problem, you could prompt a federally ordered recall. Go to NHTSA's website http://www-odi.nhtsa.dot.gov/ivoq/

Quick comment on the first reply regarding the 850 tank -- the AWD cars use a different tank layout than the non-AWD 850 / V70, so not sure if there is any relation to 850 tank recall.

My AWD car did have a gas leak on the driver's side tank, which would only happen on hot days with tank full. Turned out that the top 'access panel' where the fuel lines leave the tank was loose. They had to drop the tank and tighten the access lid and its been fine since.

Volvo 850's had a recall due to a gas tank leak - not sure if this applies to V70 also - it might apply to a 1998 since it's mostly the same. Search for "gas tank recall" on this board, on the internet, and possibly call your dealer to see if the recall applies.

-Daire