I had my awd shut down on my 2004 v70xc. Rear wheels did not work. Sometimes would, then would not. Found that I had other odd problems too. Solution was actually to replace the ignition tumbler and switch. Tumbler was one problem maybe, switch was another. What was found was that when the rear wheels did not turn, if I pushed in the key straight towards the center of the steering column, they would start turning. Other intermittent electrical problems associated with this.
Later, the rear wheels would stop when I got an ABS error. When this error occurs, my tripometers would "------" out, and the odometer reading would freeze and not increase as I drove. No ABS would work. It was fixed when I replaced the abs module located beneath the brake master cyclinder. Local dealer wanted $1,360 to do the job. They would have had to order a new module from Sweden pre programmed with the vin in it. Instead, I purchased a rebuilt unit from xemodex.com for $499 including shipping and returning core. Probably took me 2 ours to do. Someone that knew what they were doing can probably do it in 30-40 minutes.
Used this video to figure out how to replace. Takes a special E5 torx socket. This is a female socket, not the male.
http://www.youtube.com/watch?v=wtyg6o7QTXE
Not sure if this is your problem. The abs error light coupled with the tripometer odometer errors indicates that the module has frozen and isn't communicating. It is often intermittent.
Best of luck,
Barbershores