Bells;
"testing the voltage from the -ve of the coil to earth with the points closed and ignition on. Result - battery voltage." ...that sounds like the crux of the issue: Reminder...when points are closed, they are (or should be!) closed to chassis, enabling Ign Coil primary current to flow...if you are measuring Batt V on Ign Coil Neg (Points node) with points "closed"...they are not
electrically closed, and that is not right! I'd concentrate further troubleshooting in this area...it may be as simple as something has come loose where the wire connects to the Points...
See also:
http://www.sw-em.com/Volvo%20Ignitio...ition%20System ...yes, it is written based on the armored Ign Sys of models other than your ES, but that involves the Ign Coil +, not the Ign Coil - (Points node) where you should be concentrating efforts.
Good Hunting!