1997 960 Sedan, original owner, 207k miles, has not overheated, engine temp gauge is straight up at the middle of the temp range, is not blowing smoke out the exhaust, but it empties the coolant res. tank in around 150 miles of driving, or about a week of daily driving. Has evidence of oil in the coolant res. tank, and yellowish slime on the oil fill cap and dipstick after the engine is warmed up. When I change the engine oil, the oil is dark, but does not show any slime mixed with the oil in the catch pan. The engine oil level does not increase with the loss of coolant. There is some similar yellow slime collecting down near the transmission, perhaps dripping down the block from above. Cannot see well up there. It seems to be the same oily slime as on the dipstick and fill cap.

I just got the car back from the local Volvo dealer/service center. Their $180 diagnostic could not find a massive coolant leak like a blown head gasket. They said they suspect a small leak, maybe in the head gasket between the coolant and oil passages, or a crack in the block. They want $10,000 to fix it with a r/r remanufactured engine, or maybe $9,000 for a head gasket replacement. I can get a used '97 960 with around 90k miles nearby for $5000.

I am going to drain/replace the gunky oil and coolant myself, and see if I can isolate the oil cooler as the problem. Maybe it is passing fluids inside the unit somehow? Not too common, but I'm hoping it is something simple like that instead of a cracked block or blown head gasket.

Any other ideas I should consider? More things to check? I have read the many posts/tips on the subject of 960 head gaskets on this board, but so far none of that info seems to confirm what issues I have, as far as I can tell.

I am about to do the timing belt replacement on this engine (due @ 210k miles), but don't want to go there if it is a hopeless cause.