Don't freak out about your compression results. Several things I'd do right off the bat are:

1. adjust valves hot to +/- 0.0005" by using go and no go feeler gauges (spec size for go and +.001" for no-go). Once you've done this a few times it'll take a total of 30-40 minutes, and the 'ol Volvo will run MUCH smoother. This will give the cylinders much more equal distribution of the work load and will help to equalize uneven compression results.

2. Dose the baby up with Marvel Mystery oil. If you're oil hasn't been changed recently then change it with 3.5 parts good 20W-50 and 0.5 part Marvel. If you suspect stuck rings then pull the plugs and squirt 2-3 tablespoons of marvel into each cylinder and let it sit for as long as you can tolerate to allow oil to work it's way down into rings and work on loosening up carbon deposits. It'll smoke when you first start up after this but not to worry.

3. Dose the fuel up with an injection system cleaner. I'd use Techron or Berryman's. Some folks recommend Marvel in the fuel, but I stopped doing this due to possible (?) bad chemical reaction with modern fuels. A fellow suggested to me that fuel system cleaners may contaminate oil, which seemed like good advice so I often time application of Techron to preceed an oil change by a couple of gas-tank fills.

4. After completing 1,2,3, then take 'er for a long cruise including fast freeway (as much as safety and law will allow) as well as some long uphill mountain grades taken at high rpms and WOT. This will really help to burn out combustion chamber deposits and allow marvel and techron to do their thing. Engines like getting opened up and aired out.

Now try comp test again. Test with engine warm and throttle blocked to full open.

Sounds like fuel system is good. Excess lean will show on plugs as bright white, slightly powdery texture. Smooth white with a touch of yellow or brown is ideal. I wouldn't mess with fuel system for right now. Be sure to check points & ignition timing tho.

Later!
Al