With time and money, anything's possible. However, since Volvo built cars close to what you're after, you'd be better off, and money ahead, simply buying a car with the power you want. And sell your base model to someone who's not looking for a real fast car.
1) Lots of 740 and 940 Turbos around, and if you are looking for somethign a bit different, check out a 760 Turbo or a 940SE (essentially a 960 with the turbo-4 engine instead of a 6).

2) The 960/S90/V90 cars are pretty reasonably priced luxury cars with the 2.9 inline 6 from the factory. 180-200 HP, all stock. Very smooth, powerful cars. Sedans and later wagon have independent rear suspension. Also the last production RWD Volvos (built until 1998). Converting a 740 or 940 base model to a 2.9 would require significant work, including essentially everything drivetrain-related from a parts car.

3) There never were any 2.9/T6 engines in RWD cars, but that's not to say that a 960/S90 couldn't receive a major power boost from a turbo setup, presumably the twin-turbo arrangemetn in a S80 T6.... I'm sure it's a very tight fit under the hood but again with sufficient cash, anything's possible. Got $10K to spend?

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Rob Bareiss, New London CT ::: 86 244DL, 87 244DL, 88 744GLE, 91 244: 808K total