Adrian,

Where in San Francisco?

If the transmission is slipping that badly, you probably need a new clutch. The cable can be adjusted with relative ease, but if the pedal is really engaging that late, it probably won't do you much good. The OEM cables last forever (original on my '84 at 287,000 miles) and rarely need adjustment unless they are installed improperly.

Depending on your level of experience/ability, this can be a DIY job. The parts aren't very expensive, but it is a time consuming ordeal. You would have to remove the transmission crossmember and drop the tranny to get at the clutch. Most "shadetree" mechanics (myself included) aren't brave enough to dig into the bowels of their transmissions. :-)

My best advice to you is to find a reputable independent Volvo/import shop near you (e.g. don't let your corner gas station do it), and have them look at the car. I can't even guess what they might want for a complete clutch job, but I wouldn't imagine that it would be insanely expensive. If you decide to have it done (if the car is otherwise in good shape, why not?), ask them about replacing the rear main seal and tranny mount while they are in there. Might also want to have your u-joints checked. The labor for having these parts replaced individually later on will really take a chunk out of your wallet. Best to have them replaced (if needed) while everything is already apart.