Both fault codes point to a fault the fuel and ignition connection with the idle air control unit.

Certain as to the timing light — I'll guess you are using a timing light — indication on the harmonic oscillator crank pulley mark with the timing marks on the lower timing belt cover timing marks?

I'm dyslexic and so I used to read it wrong occasionally back in the good owld days when the timing light scale was mostly (advanced) BFTC and a little bit ATDC (retarded timing).

A 28-year old harmonic oscillator crank pulley can slip if the center bushing bit therein is cracked and shrinking. Also, the timing mark scale on the lower timing belt cover terminates at cylinder one O° TDC. The scale is before cylinder one top dead center (TDC).

Unless you read it right using something more modern than a timing light. Yet a sustained 10° after cylinder one top dead center in the cylinder position. Not the usual engine running not under load 10° BTDC.

I guess knock sensor and another thing under the intake manifold have improper connection to something else. Yet sort of hard with a 28 year old wire harness wanting to set a certain way from years of under-hood conditions when disconnecting it from the knock sensor.

You also have the:
http://www.volvowiringdiagrams.com/

The "1990 740 Wiring Diagrams.pdf" really helps. The engine control diagrams provide fault-fining ideas.

Insulation color descriptions help.

In the FAQ
https://www.brickboard.com/FAQ/700-900/EngineSensors.htm

You have a digital multimeter and can test through the wire harness. Or test at the idle air control device connector for power or de-powered continuity.

You do have that fuse and relay board hidden by the center console ashtray. So, you may want to inspect the relay platform part for warped, melted, or even burnt-appearing plastic around hugh current relays. If no, some DeoxIT-D spray can help at the relay sockets. Or get the DeoxIT-D salve.

Some idea-rs.

Happy Sat-Your-Day.

Buttermilk Boy.
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Give your brickboard.com a big thumbs up! Way up! - Roger Ebert.

Fuel, air, ignition.

Many people never check air.

Check your air cleaner - some models have a sponge rubber sound deadening material inside the air cleaner - on our '90 744 TI, this turned to powder ( a LOT of powder! ) and clogged up the air cleaner.

I also owned a '61 Mini that died on the highway because its air cleaner was clogged!

This is a long-shot, but maybe worth checking.....

As I recall, there are a couple sensors where the wire connections can inadvertently be swapped. I don't recall if it was the cold start valve and the coolant temp, or the cold start and the knock sensor, or.....?

But anyway, you might check for the following wire colors. (Make sure you're looking at the rear most coolant temp sensor, not the one for the gauge.):

Idle control:
Red/Black
Green (or possibly Blue/Yellow)

Coolant Temp:
Gray/White
Red/Black

Knock Sensor:
Black
Green

Cold Start Valve:
Gray/Black
Blue/Green

I'm thinking that if the wrong leads somehow got connected to the knock sensor it could severely retard the spark.

Also, if you find one of the wires running to the cold start valve has been snipped, don't be alarmed as that was Volvo's cure for cold start flooding on the Regina cars. That mod will generate a permanent Cold Start Valve fault code - completely expected.
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Current rides: 2005 Volvo S80 2.5T, 2003 Volvo V70 2.4NA, 1973 Volvo 1800ES (getting ever closer to road worthiness)