Reading your post again I realized you said that the 83-84 where hall effect and the 85-88 where something else. I believe they both have the hall sensor in them, its not until the 89 that you get the sensor on the top of the bell housing behind the engine block. My only reasoning for two distributors being different enough would go along with the same idea that the two ICU's from the LH2.0 and 2.2 wouldn't be compatible. There must be something there that just doesn't compute. At some point the 02 sensor is finally warming up on its own and the engine does something to try and compensate for the lean/missing engine. Its not firing the fuel injection at the correct time or maybe missing the signal. Some how it computes and gets the timing down enough but I think even when the power kicks in its still not accelerating like it should and running a bit rough.

here is something I found on Ebay tonight. First time I've found someone saying these years should be compatible.

http://cgi.ebay.com/ebaymotors/Pickup-Coil-1984-87-Volvo-240DL-240GL-240GLT-240GT-740_W0QQcmdZViewItemQQcategoryZ33689QQihZ027QQitemZ400040846707QQrdZ1QQsspagenameZWDVW#ht_4111wt_832