The lambda light came on in my 98 S70 non turbo (340,000Kms on the clock). My mechanic found the following:

MIL light on,
FRT 436, REAR L025
Compensation P0133

Okay, so the rear O2 sensor is done and needs replacement. We do that and reset. A day later the lambda light comes back on. Here is what the mechanic found:

MIL light on,
FET 436 REAR H025
Compensation P0133
FET 443 TWC Efficiency
P0422

Okay, so the front 02 sensor now needs replacement. We do that and reset.
A day later the lambda light comes back on. Now he tells me I need a catalytic converter replacement! What the heck? I should mention that my mechanic installed Bosch O2 sensors to save me money but I've heard these replacements are iffy at best as a replacement for the Volvo OEM's.

I thought a CAT only failed if it rotted out or became plugged up? Structurally the CAT looks okay.

So, what should I do? I cannot obtain a used CAT because all the auto salvage yards here send these things to a recycler for the platinum. They won't resell used CAT's. I hate to spend $1300 on a CAT replacement if that is not the problem. I only need to pass my E-test this year and then I'll have a different vehicle in 24 months. What is the resolution?