Hello Fran,
As previously stated, the do hickey on the side of the block is a drain for the coolant. That appears to be the later version used on the OHC Volvo engines and requires a 13mm wrench/socket to open/close. Don't over tighten since that piece is hollow and the sealing end can become distorted which can cause a leak.
Originally, all of the fuel injected B20 engines didn't come with a coolant drain, Volvo installed a plug even though all of the previous versions including carbureted B20s came with a drain. Curiously, all of the later engines, IE B21, B23 and B230, came with a block drain.
Whenever I am rebuilding a fuel injected B20, I always remove the plug and install a drain.
That "loose" hose is 1 of 2 drain hoses connected to the the air intake port drain pipes for the heater box. The other hose is located on the other side of the heater box.
FYI, it's a good idea to remove the air intake grille and inner plastic bucket to check if the drain holes are plugged which is a common problem. If the drains are plugged, water can accumulate inside the air intake and then into the car at either of the 2 fresh air vents.
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Eric Hi Performance Automotive Service (formerly OVO or Old Volvos Only) Torrance, CA 90502 hiperformanceautoservice.com or oldvolvosonly.com
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