First, my sincere thanks for all of you who have offered advice. I want you to know the outcome of this nearly month-long ordeal -- and I reveal it at the end of this. But this can be a learning experience -- and because I get somewhat miffed at folks who ask for help that we offer and fail to let us know how it turned out (not letting us know what they found out, so we can all learn from it), I don't want to be like that -- so I'm first going to recap (mainly for the benefit of those who just got bits and pieces of the whole saga) so we can have the whole experience in one place.

So it started, with my '84 240 with LH2.0 (automatic), which had never(!) before failed emissions (I'm only reporting here HC and CO, because NJ has dropped their NOx standards). In past years, just for comparison, the car scored
27 (162 max) HC, 0.02 (0.91 max) CO, in 2004 (dyno tested)
21 (162 max) HC, 0.12 (0.91 max) CO, in 2006 (dyno tested)
36 (162 max) HC, 0.15 (0.91 max) CO, in 2008 (dyno tested)
But this year, in 2010, it initially failed spectacularly in the new test protocol ("idle" and "high idle", in place of dynomometer testing):
648 (220 max) HC, and 0.03 (1.20 max) in idle mode
666 (220 max) HC, and 0.04 (1.20 max) in high idle mode
Note that, at this time, CO was still very good.

So, I started out after failing with a full tune-up (plugs, distributor rotor and cap, checked the resistance in the secondary wires), new air filter (although the old one was good), etc. Then retested:
693 (220 max) HC, and 0.04 (1.20 max) at idle
454 (220 max) HC, and 0.03 (1.20 max) at high idle

Then I started changing more expensive components, the O2 sensor and IAC (which I knew was bad), along with their hoses, and changing out all of the vacuum lines, duct (AMM-to-TB), and flame trap hoses; and adding secure clamps to everything. I also cleaned the TB and checked the Throttle position switch. I also tested all the connections to the ECU plus (following Bentley, and the green book for injector behavior). Then retested:
749 (220 max) HC, 0.00 (1.20 max) idle
801 (220 max) HC, 0.02 (1.20 max) high idle

Then I replaced the AMM and tried to adjust it -- I couldn't get good O2 sensor fluctuations, so I just set it to 330 ohms (as I had always done in the past with good results). And I retested it:
827 (220 max) HC, and 0.04 (1.20 max) idle
924 (220 max) HC, and 0.05 (1.20 max) high idle
And again note that, up to this point, CO was still very good.

Up to this point, the idle has been terrible (irregular, and difficult to set "base idle"), and I noticed that the timing mark at idle was jumping all over the place between 0 and 12 BTDC.

So finally, at everyone's urging, I changed the intake manifold gasket and injector seals. And I retested -- hold on to your hats(!), because I haven't reported this yet:
716 (220 max) HC, and 3.89 (1.20 max) idle
245 (220 max) HC, and 4.20 (1.20 max) high idle

Take note that whereas the high idle HC went down almost enough to pass (but the idle didn't appreciably change), the CO went sky high and was now in spectacular violation!
But on the plus side (if you can call it that), the idle is now very steady, and so is the timing mark (which was right on the proper mark, without my having to adjust the distributor). I must have had an intake manifold leak! You guys were right!

[FYI, also note that every one of these test results were made on the same machine (same reinspection line of the same state inspection station). I did, once, go to another inspection station, but the results were similar.]

So on the same day as the above failed test, I took the car to my Volvo dealer, and he said that he no longer has a working CO gas sampler (it's been that long that they've needed one), so he couldn't reset my AMM pot to reduce the CO; but he did have his tech look over what I had done, and also perform a compression test (because he thought that maybe the engine was just worn out). However, his tech found, quoting their written report: "175 psi across 4 cylinders", which I assume is good [although he evidently didn't do a "leakdown", because that's all the numbers he reported].
And I'm not surprised: I've always used synthetic oil (since I bought it in 1986), and likewise for the valves and injectors, the gas I've used has only ever been premium(!) grade Exxon or Amoco (now BP - and never again!), not for the octane as much as for the extra additives (IMHO).

Anyway, although he no longer had the equipment for the gas sampling, he recommended a private shop that was an state-authorized reinspection station (and of course had the gas analyzer equipment). I called them, made the appointment, and took it in this morning. Here's what happened (the FINAL outcome):

First, he found two new problems:

1) There was a MAJOR air leak around the ribbed, "AMM-to-throttle body" hose where it attaches to the throttle body. Now, the hose was brand new (Volvo-branded), and I use marine-grade (stainless steel, high torque, non-perforated, CG-approved) clamps, and I thought that was adequte. But when he put his "smoke machine" on the AMM end of that hose and pumped smoke into it to reveal any leaks anywhere in the intake system up to the intake valves (I was impressed by the cleverness of this device), smoke poured out of the edge of the hose around the throttle body -- I swear it looked like the oil escaping the "top-hat" on the BP disaster! That was a massive vacuum leak!!! He told me that this is a common problem -- people think that the clamp is enough, but sometimes the hose, especially when new, is just too stiff and leaves gaps that don't close even with a tight clamp.
So he put some black putty sealant around the edge of the throttle body's throat, then reinstalled the hose and clamp, and no more smoke. That seemed to eliminate that problem.

2) The car still wasn't running perfectly smoothly -- although it was MUCH better than before. There was a slight "loping". But when he jiggled some wires on the harness near the firewall, the car briefly smoothed out.
So he started pulling apart the wire bundle near a large connector, and found the wires' insulation in the wrapping had disintegrated. They were shorting out!
Then he started unraveling all those wires down to where the insulation was good (or better, anyway), and then hand-wrapped each of the five bare wires with tape. When he finished, the car ran as smooth as my '93's.

Finally he started testing it with the gas analyzers, adjusted the pot on the AMM a little, and everything was good enough to pass. He didn't give me the usual report (it's a private, not state, inspection, and he held on to the paperwork), but at least I've got my car's new inspection sticker that's good for the next two more years!!!

So, bottom line was that the main problems included (besides the IAC which I knew about for a while):
1) intake manifold gasket.
2) leak around the mouth of the throttle body
3) shorted wires in the harness

So keep these in mind (especially #2, which I think few people would think of).

And again, many Thanks to all of you who contributed your suggestions.

Best regards to all.
Ken