I have a '94 turbo wagon with 128 K miles on it & I had the knock sensor wiring
harness replaced about 5 or 6 years ago. Volvo had just come out with a second
wiring harness to correct this. I was told knock sensor malfunction was common in this model.
It has worked fine except when I put regular gas in it for a couple of fill ups.
I reset the codes and am careful to put a mid range premium gas in it. After talking to mechanics who have worked on this, it seems that there was some sort
of flaw in the engine computer that was too sensitive and the revised wiring
for the sensor somehow corrects this. Cost for the part was about $100 and
another $200 for the mechanic to install.
Hope this helps.
Don in Denver