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Does your engine have a vacuum advance on the distributor? If so, try
disconnecting it. The diaphram in the module may have broken.

Gary

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What is an IAC valve?  Idle control motor/valve?

1) Pull throttle body, clean (with lacquer thinner), and reinstall.  I
can usually reuse the green gasket.  Sometimes i make a new one from a
sheet of bulk gasket stock.  May need to get a new butterfly shaft seal
that sits on shaft opposite idle control switch.  Is available from
Volvo dealer only as far as i know.  While you have the throttle body on
the bench, you may consider applying the improvement listed in the
following URL: http://www3.bc.sympatico.ca/Volvo_Books/maint3.html.

2) Poor AMM contacts usually cause the car to go into "limp mode", and
you will know that for sure because the engine won't rev over 3,000 rpm
and have little power.  Cleaning AMM contacts is always a good policy
and i do this at a 6 month interval.

3) Check that the idle control motor is actually working.  It should hum
with engine idling.  Use the old "screwdriver handle to the ear" trick
to act as a stethoscope.  Pull the idle control motor, and clean it
thoroughly.  I recall that both devices on my 1989 sedan were filthy
about 3 years ago.  The engine idled perfectly afterward.  With Mobil-1
motor oil, the amount of deposits will decrease.  I also put an
insulating sleeve on the rubber hose from the PCV valve to the throttle
body to reduce buildup of sludge.

4) I assume that you replaced the plastic fire screen in the PCV tube,
and that you cleaned the small orifice in the brass vacuum fitting on
the manifold?  By the way, i liked your description of "measuring" the
vacuum in the engine using a chunk of oil coated plexi-glass on top of
the oil filler opening.

I use an old metal oil filler cap into which i soldered a short length
of 1/4 inch copper tube.  Then i get about two feet of clear tygon PVC
hose, and slip that over the copper tube.  Next, i make a U-shape with
one foot of the hose on the other end, and hold it on a paint stirring
stick with two elastic bands.  Now i have a make shift U-tube manometer.
 After adding some water to about half way in the U-tube, i can measure
vacuum in inches of water when i attach the oil filler cap to the
running engine.  You can hang the manometer on a piece of wire on the
hood.  The vacuum you will see should be somewhere between 0.2 to 0.5
inches of water.  There is no danger of sucking water into the engine.

5) The injectors rarely need cleaning.  In the 10 years i have run the
240 sedan, i have never noticed a problem.

6) The O2 sensor should be ok, as no codes were set.  When that sensor
fails, the engine will run in another "limp mode" with an extremely rich
mixture.  I have replaced the sensor twice in 10 years.  Next time i
will buy a generic Bosch one, not a Volvo brand as they cost too much.

7) I can't remember if the 1989/1990 models have a vacuum line to the
ignition computer or the ECU.  The 1986 model has a line to the ignition
computer mounted next to the window washer fluid reservoir.  Perhaps
someone else cares to comment on the presence or absence of vacuum
advance on 1989/1990+ years of 240 Volvos ?

/ JCH