I've been having a similar problem on my 2001 every winter for 3 years now (everything is ok in the summer - the code goes away). The error code reads camshaft reset valve. My volvo garage changed the part as the first step in troubleshooting (sounds like it's the same part as yours), but the problem got even "worse".. I guess the new sensor is more sensitive. Since then, the dealer and the garage told me that the problem is likely related to sludge in oil system and that these cars or prone to this, but that the problem does not affect performance. It would make sense as the previous owner only changed the oil every 13k km. I've been trying to flush it out for a while with products and synthetic oil, but so far the problem is still there.
I'll be off to the garage next week (time permitting) and will keep you posted.

Does your light come on on start-up, or wile driving? (mine is a few seconds after start-up). Do you know if the oil changes were done regularly from the start of the car's life?

Anthony