Hello,
You should always remove the warning valve switch whenever you bleed the brakes on the early Volvos with a warning valve to prevent damage to the switch.
However, we have NEVER had a warning valve cause a brake bleeding problem.
And if the warning valve could cause a bleeding problem, it should cause a problem with all the brakes on 1 circuit.
You are describing having problems bleeding one rear brake and since you have the brake hoses, you problem can only be a stuck or plugged brake proportioning valve.
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Eric Hi Performance Automotive Service (formerly OVO or Old Volvos Only) Torrance, CA 90502
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