There are 2 things that can go wrong: The output shaft in the bevel gear/transfer case gets loose and is not repairable, and/or, the front CV joint destroys itself. I would 'assume' both problems. Colorado driveshaft will supply a front CV joint for less than $200, it is 'easy' to replace.

A used bevel gear from an 05 should work nicely. The oil should be replaced, of course, before installation. A 'good' mechanic should be able to replace it in a few hours, the right front drive shaft may need to come off.

The problem is diagnosing the current bevel gear. The front CV joint must come off the shaft to expose the output shaft of the bevel gear so you can check for play. Also, one should check the oil level in the bevel gear box. the oil should be at the bottom of the fill hole (similar to a manual transmission).

http://www.coloradodriveshaft.com/volvo.htm
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