Your oil separator box, under the intake manifold, is probably clogged and/or the hoses to the turbo area are also clogged. These need to be replaced as soon as possible to prevent further damage. If you check this site, there is a drawing of what you will need:
http://www.fcpgroton.com/volvo850oiltrapturbo.htm


If your brakes are warped, have the rotors machined smooth, get new pads, and break them in properly. Always check the torque values of the lug nuts.

Klaus
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Please answer your responses. We need to know if the advice is good or bad. The 164 has a new home, all I am left with are 2 turbos :)