"The issue you describe make sense since the car seems to run better before it gets up to temp. Which begs the question, do they run in a closed loop until warm?"

The ignition system is active and intelligent right from the start, but it changes the knock advance/retard based on the engine temperature, knock signals, speed & load, etc. The lack of a signal from the knock sensor will cause a 9 to 11 degree retard (safety program), but the fact that the engine is cold may cause it to advance it a few degrees. As the engine warms up, this advance will be reduced or eliminated. Also, while the engine is in warm-up mode, the fuel injection system will run the mixture a bit rich to speed up the warm up process, and this will give a bit higher compression pressures (but almost neglidgable).

"What i dont have yet is a service manual, do you have a brand you would reccomend? I have used the Bently manuals for my AUDI's, tend to stay away from the haynes and chiltons for the older stuff."

Unfortunately, Chiltons produced horrible Volvo manuals and I avoid them at all costs. The US-Haynes book for the 700 series was incomplete, and never received it's final update (like the 240 Haynes book). However, it does go up through 1988 and thus covers the B280 engine (be careful not to get confused with the older B28 engine CIS stuff), but will not cover the 780 body/glass/interior. Sadly, Bently never wrote a Volvo 700 series book, and thus the Haynes book becomes the only affordable/cheap service manual you can get for a 700 series Volvo.

The best service manuals to have for your Volvo are the actual Volvo-Green manuals. On eBay, they typically cost as little as $5 for the more common manuals to $25-$30 for the more desired ones. You can also purchase them new from Volvo at www.volvotechinfo.com for about $20 to $50 each. Check eBay frequently and try to get a copy of the following ones:
-Volvo 780 Glass & Interior Fittings
-Volvo 780 '87 New Car Features (covers all new hardware used on the 780)
-Volvo 780 '88 New Car Features (updates from '87 and basic IRS info)
-Volvo 700/900 Independent Rear Suspension (IRS)
-Volvo 700 Brakes with ABS (make sure it says ABS in the title line)
-Volvo EZK 115, 116, 117 Ignition Systems
-Volvo B280F Fuel Injection Systems (LH 2.2)
-Volvo B280 Engine (covers repairs & service)
-any year from '88 through '91 Volvo Maintenance Manual (walks you through the steps in the service schedule that you downloaded from the Volvo online library) This one is probably not needed if you're a competent do-it-yourself mechanic.

"the oil temp seems to stay on the cold side, possible sensor problem or is there an oil cooler (the air dam is missing)?

The lack of an Air Dam may be causing the sensor to read colder, since it's right there on the bottom of the Oil Pan. My oil temperature gauge hold at right about the middle. The Oil Temp Sensor is mounted in the Oil Drain Plug on the oil pan, and it may be over-cooled or it may be going bad. It's hard to say without checking it against a new unit and comparing resistance values. I'd warm up my own 780 and give you the temp/resistance numbers myself, but unfortunately I've got the intake manifold and other hardware removed at the moment. Fortunately, the Oil Temp sensor on this car only sends data to the dashboard gauge and neither the Ignition System or the Fuel Injection system received data from it (but they both receive data from the Coolant Temp Sensor mounted in the waterpump). FYI, the Coolant Temp Sensor for the instrument cluster gauge is a seperate sensor, mounted under the intake manifold and the back end of the engine block, and only supplies data to the instrument cluster.

Lastly, from a performance standpoint, what is reasonaable to expect form this motor, stock or otherwise.

About 165 horsepower, decent acceleration, but nothing to race with. It's not hard to break a tire free while accelerating around a turn or on damp pavement, but she wasn't intended for racing in her stock form. The car can hold it's own on the Autobahn, but not against a Ferrari or Maseratti. This vehicle was designed to be a "Touring car" and was intended for long, comfortable drives through the countryside or along a winding mountain road. -the opposite end of the spectrum from "The Fast & Furious."

God bless,
Fitz Fitzgerald.
--
'87 Blue 240 Wagon, 269k miles.
'88 Black 780, PRV-6, 149k miles.