The rear suspension seems to be a bit out of whack on my '92 960. There is about 1.5" or so of space above the tire and below the fender on the driver's side, but on the passenger side the tire actually sticks up into the wheel well about 1". The springs look ok at a glance, neither is obviously broken, or out of place, and in general, both sides look pretty much the same, suspension stuff wise. I was wondering if perhaps I blew a shock, and that is causing the car to ride low on that corner, or if somehting else might be wrong. I think I'm going to take it into the dealer to have them fix it, but the auto workers on on strike here, so it might be a while, so I was curious what it might be.

The original volvo part is close to $400,
www.fcpgroton.com - has the same type Boge nivo for $195 (60-180-0), these are far superior to the standard ones if converted. They are the same for 760's and 960's upto 94'

This is typical for an older 960. Your car is equipped with a self leveling suspension. This consists of very thin springs that only support part of the weight of the car. The rest of the weight is supported by Nivomat shocks which do the selve leveling part. The shocks usually have a life expectancy of 100k miles. Anything over that is bonus time. The shock must be replaced with another Nivomat because the springs are unique to the Novomat suspension. You can not use normal shocks because your car will continue to sag. The schocks go for around $200 each. You must replace both at the same time. If one failed the other one is not far behind.
I don't know if you have a sedan or wagon but both are prone to the same failure despide the different suspension designs. For wagons, FCPgroton makes a kit for $200 that replaces rear shocks and springs to eliminate the self leveling feature a half the cost.
There is a wealth of information in the FAQ on this subject under the features button.
http://brickboard.com/FAQ/700-900/NivomatConversion1.htm#Volvo760780NivomatShockConversion

Good luck
Justin

Thanks, the car is a sedan with about 133K on it, so I guess the shocks had a nice long life. Since I'm lazy and the car repairs are paid for by my dad, I think I'll just get Volvo to replace them both for me. Is it safe to drive it like this for a while, because I'm really not sure when it is going to get fixed?

I have see a few on the road in this condition but it is not safe. Volvo will charge you an arm and a leg. fcpgroton.com has them for 200 each. Get a quote but I bet the dealer will cost a lot more. Any repair shop should be able to do this.