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I also have a 99 S70 AWD. Purchased this car about a year ago with 120K on it. At about 138K I noticed a rather abrupt jerking feeling when I turned the steering wheel hard to the left or right (thought the whole drive train was locking up). Long story short, there is a component that connects the rear drive shaft to the rear differential called a Viscosity Coupling (VC). This is a mechanical unit filled with friction disks and silicone that senses when the front differential is loosing traction and redirects torque to the rear differential. Overall a pretty reliable AWD system - but when there are problems they get expensive. A replacement VC runs about $1,600 from the dealer plus three hours labor to install. I have not found anyone that can refurbish or rebuild one.
The good news is most on this board agree that no serious harm is done if you just keep driving the car. Others have recommended removing the rear drive shaft altogether and just convert over to FWD....
I am now at 148K and it is annoying but no big deal. car drives great with this one exception and feels good on the road.. Plan to drive it till it dies...
PS . This board is a great resource and can help with almost anything that comes up...
Oliver
Over a million Volvo miles and still smiling :-)
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