I have a 1987 240 wagon with a bad transmission and probably over 200K on the engine, maybe considerably more. But the engine is still running fine. I also have a '91 wagon which was absolutely pristine until I put my wife in it for a short interval while I replaced the transmission in the '87. BUT that only lasted a few days; then it was totaled in a crash. My question: would there be any difficulty in doing a transplant of the engine and transmission from the '91 into the '87? I'm curious about issues with engine controls, injection and so on with the newer engine. Anyone been through something like that?

Been there, done that, transplanting a 92 engine into my '87. Not for the faint of heart, but with patience, things will work out. The newer engine will not have the same engine controls as the 87. I opted to keep the old engine controls (after replacing all of the wiring harnesses that were deteriorated). I swapped intakes, using the old injectors, fuel rail, etc. Later replacing the injectors with new ones. I swapped the old distributor into the newer engine, because the newer engine used a CPS to fire the plugs, and I needed to fire the plugs "the old fashioned way" with the hall sensor in the distributor (the 91 distributor from your engine will have no "guts" in it). By doing this, I eliminated the need to swap any major harnesses or engine controls from one car to another, eliminated the need to install a different flywheel on my '87 tranny which I was keeping, thereby keeping the swap simple. While the engine is out of the car, do all of the things you think are necessary. I ordered a new larger breather box from Volvo and installed it, as well as a new water pump, thermostat, timing belt, tensioner, front and rear seals, starter motor, motor mounts and accessory mounts, and of course new belts and hoses. Here are some pics and a description of the work: http://www.facebook.com/media/set/fbx/?set=a.1368181683123.53563.1189132524&l=75a2564d60
Good Luck!!
--
http://www.facebook.com/album.php?aid

hello-
i'm about to do an engine swap myself, but with a turbo engine. i would look into which fuel injection system your 91 has. if it has the 2.4 system, you will need to use the engine coolant temp sensor from your 91. if all sensors in your 91 work, i would recommend just using those. your AMM will make up for the slight difference in fuel delivery.
while you have the engine out, you should replace the rear main seal and if the timing belt is getting up in age, that too. these are much easier to replace while the engine is out of the car.
get a can of engine degreaser, and if you're feeling particularly motivated, repaint the engine (so it looks cool!) it's good to have a clean engine because it makes it easier to track down any leaks you may encounter later on. good luck.

ignore my post except for the engine cleaning advice.

I believe you will be dealing with a different ECU after '88, along with elimination of the Hall sensor (crank pos sensor at rear of engine on 89>), along with diff fuel delivery. I moved an '89 motor into an '88 a few years ago under the guidance of a professional Volvo tech...would be reluctant to have pursued that without him.

More senior hands here know a LOT more than I do. It's certainly a 'do-able' swap, but not as straightforward as you may think.