I have a 2001 S60 with 98K on it.

I am getting a low oil pressure warning and no one, including the dealer,
seems to know what the problem is.

Chronology:

Took car to Volvo Mechanic (Not dealer but a certified volvo guy who has
worked on volvo's for 20 years).
-Replaced Oil Pump (and timing belt while he was in there)
-Took of pan and resealed everything
-changed Sensor
-PSI is just under 10 at idle
-No warning light at 900 RPM
-Idles around 850 RPM

Notes:
No sludge or issues noted on the engine when he took the pan off.  He said
the engine looked fine.  I have always changed my oil within 30 days of the
service light coming on.  I have never had anything less than the best
synthetic oil put in the vehicle. I have never pumped anything but premium
into the tank either.

After the local guy gave up he suggested taking it to the dealer.  The
dealer said they found sludge on the oil cap and told me that I needed to
have the Cylinder head rebuilt for $3500.  They also told me that that may
not fix nor even be the issue. The original mechanic wanted me to call him
and tell him what they said.  He scoffed at what the dealership said because
he had put in his paperwork, that I gave to the dealer, that he should have
seen sludge in the oil pan, which he didn't.  I called my brother (20 year
mechanic...not Volvo specialist though) and he also said that the dealer was
crazy and that there is always some sludge on the oil cap especially in
Phoenix Arizona where it is so hot and where the car has been for the last
six years.  I just moved to Alpharetta, GA.  He also stated that while there
are some good mechanics at Volvo, most of them are part replacers and if the
diagnostics can't tell them the issue, they have no clue.  The mechanic who
worked on my car was about 20 years old...I am not sure how much experience
he had.

The car runs fine, plenty of speed and power.  Neither mechanic said they
could hear any knocking at all and the car has never overheated or even been
past the midpoint on the heat gauge.

I found a refurb engine on ebay for under 2K and I have a guy who will
install it for me, I don't think I want to spend $3500 on something that
"may" be the problem.

Anyway, if anyone has any suggestions I would greatly appreciate it!

Thanks

John