Well I do try
I'd change every single oil seal and gasket, clean the sludge out of the sump like Tony suggested and the head as he has suggested.
Only use genuine Volvo for everything, only gasket they don't do is the exhaust manifold so you will have to get PPS off of eBay or parts for Volvo.
Clean the throttle body thoroughly when changing the gasket and also as yours doesn't run properly check the base idle setting.
I would also clean the header tank, a trick Dave taught me was denture tablets! Put the header tank in a bucket and cover with water and 6 tablets and leave it for a few days. It will look like almost new when it comes out again.
Inspect the condition of all the coolant hoses while there and change the alternator mounting bushes if they have squashed down.