You're right - the tach dropping while the engine is still rotating is a
convincing indication of the ignition dying.

Three common trouble sources come to mind:
1) The crank angle sensor. In the 940T I think it is in the top of the bell
housing, but it could be in the distributor. I'll leave it to the experts to
clarify that. The crank angle sensor has caused more frustration than any
other intermittent failure because it fails when it wants to and comes back
when it wants to... no rhyme or reason.
2) The ignition module. Since ignition module problems are almost always
heat related and you have done a basic check I don't think it's your
problem.
3) In some models of Volvo in this era there is a "radio suppression" relay
somewhere near the A/C drier. My 765T doesn't have one so I don't know what
it looks like. User or Mike F would be the top sources of that sort of
detail.

A less common source but too easy to overlook is a bad connection at the
battery. If that maintenance is overdue now is a good time... but I don't
think that is the problem.

Mike