If you do the swap, the 850 will just be relegated to the back of your nice garage, behind the other cars. The 2.4L engine does put out 200bhp, but nothing like the 240bhp of the R engine. And don't even think of putting on a larger turbo, the engine internals cannot handle it.
The R engine has special porting on the intake and exhaust to get more bhp. It would be worthwile to repair the head and fix it. The oil separator needed to be replaced anyway, along with all of the vacuum lines.
I think you will be happier with a true R than taking the badge off the rear.
Klaus
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Proud owner of a 220S. If I had more room, I would have more Volvos.
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