I had the bad luck of having a flat on my 98 V70 AWD. This is the model
with the viscous coupling that can be damaged by mismatches in tire
diameter.

I am using 205/55/16 Michelin MXV4s, and have taken the following
action so far:

i) the flat (passenger front) was replaced with the exact same tire,
brand new, having 10/32" of tread depth.
the driver's front was at 13/64" of tread depth, and the two rear tires
at 7/32" of tread depth.

ii) I have rotated the two rear tires up front, so that both passenger
front and driver's front are at 7/32", and rotated the two front tires
back so the rear driver's tire is 13/64" and rear passenger's 10/32".
All tires are inflated to the same PSI.

To summarize the tire diameters:
driver's front 7/32" (formerly driver's rear)
passenger's front 7/32" (formerly passenger's rear)
driver's rear 13/64" (formerly driver's front)
passenger's rear 10/32" (new tire).

I understand that the system is very sensitive to differences in tire
diameter and asking the dealer, they indicated that the tolerance is
within 3/32" of wear. My concern is that the new tire, at 10/32" is
7/64" larger than the smallest tire (13/64"), which is 1/64" (0.5/32")
over the recommended tolerance.

Do you think that the difference in diameter is severe enough to damage
the viscous coupling in the car?

What would your recommended tire placement be based on the diameters
listed?

Thank you for your help.