The cylinder the key goes into will freeze after a spray car wash. There is a special lub that will not freeze, but nothing but heat will unfreeze the lock cylinder. Thank goodness for remotes.
As for your remotes not working, it is your procedure that is at fault. After 5 turns of the key, watch the red light on the dash. It will come on solid and then you push a button on ONE of the remotes, then flash for a few seconds and become solid again, then you press the next remote button. Up to 3 remotes can have their frequency stored.

The Haldex awd replacement came in 02 or 03, whenever Volvo ran out of the old units. To be safe, I would tell your friend to start with 03 and go as new as he can. They still need the bevel gear oil replaced at 60K intervals. And the front tire treads must be equal to or greater the rear tires.

Klaus
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The 164 has a new home, all I am left with are a 95 854T and a 98 V70R :)