Almost certainly a head gasket leak. One quick test you can try when you suspect it's leaking into the cooling system is to remove the expansion tank cap, start the engine and run it a good few minutes until it's warm and the thermostat starts to open. If it suddenly bubbles up into the expansion tank then you know that's the problem. A Volvo indie mechanic showed that trick to me when one of my headgaskets went and I was amazed. Red blocks are known to be able to idle almost forever with the expansion tank cap off and not boil over. I'm not sure if that's as true for 960 white blocks if that's what you have, but the coolant level should still rise slowly with the cap off and not boil up suddenly. I wouldn't go driving around with a head gasket starting to go like that into the cooling system. Your heater valve or a heater valve hose could suddenly let go, or worse still the heater core. You absolutely don't want to overstress an old heater core, a horrid job to replace.
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Dave -still with 940's, prev 740/240/140/120 You'd think I'd have learned by now