Gretchen,
Where is your car now? First, I hope it is not back at the dealership unless they are paying to fix it. I'm all the way in Tallahassee, FL, so I truly don't know of anyone in the areas you asked about. However, Cartalk has a website called Mechanic X files, www.cartalk.com/ct/mechx. I typed www.ask.com to get zip codes for Evansville Indiana (47701), and Montgomery Alabama (36101). I'm not sure how correct they are, but...
The Auto Shop in Birmingham Alabama appears to have good comments, and works on Volvos.
Driver's Choice in Birmingham also has gets glowing reports. They apparently work on Saabs, so Volvos are no great stretch for them. Hell, if they can get glowing reports from Saab owners, they can almost walk on water.
Elliot's Service Center in Evansville apparently has a guy named Jack who is a Volvo guru; they got good comments.
Motors that I located, and you can too, are at www.car-part.com. You will want one WITH a turbo. Remember the turbo was also denyed coolant, also was lubed with "gunk", and also got quite hot. Atlantic in MA, 1-800-225-0812 has a motor/turbo w/96K for $1500.00. Erie Vo-Vo, 1-888-865-8613, who I have heard nothing but good things about, has one with 68K, for $2500.06. Incidentally, I think they offer a lifetime warranty on their parts when you pay that price. I'd also ask if they would throw in the coolant hoses.
You can expect to pay shipping; a reasonable mark up of appx 20% to the shop you choose, 18 hours (or so) of labor, and the cost of plugs, sensors, timing belt, fluids, filters, etc. For example, the cost here would be $4697.75 (which I would round down to $4500.) If you get the $3700.00 back from the dealership, you'll be doing great. You'll have a lower mileage motor and turbo, and a technician you can trust. At the very least, the dealership should offer to perform this same repair, and credit you the $3700.00 for what appears to be a misdiagnosis or gross negligience on someone's part.
Again, I hope this helps,
Chris
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