I just bought a pretty nice 88 740 turbo sedan m46 with 130k for $700. The only thing I have found thats not great on it is it has a slightly rough idle, and has mild power decreases when driving at high rpms. while sitting in neutral the rpm gauges bounces in between 1k and 1.5k and the turbo gauge bounces up and down. Also, as said earlier, the car has a mild power decrease when I am driving about about 3k rpms in any gear. I'm not to familiar with the turbo system, so any advice would be great. thanks.

 

I think the first thing I'd do would be to check *all* the vacuum hoses, and there are quite a few. replace any that look even a little crunchy.

I'm pretty sure an 88 turbo is LH2.2, not LH2.4, so you don't have the onboard diagnostics, so troubleshooting has to be done the old fashion manual way, there's no codes to give you hints.

The idle should be modulated by an air bypass valve which is under the intake manifold, and is controlled by the ECU, it should be about 700-800 rpm. 1000-1500 rpm is rather too high, sounds like someone dinked with things in an effort to solve a problem.

The turbo gauge is showing manifold vacuum, and it might twitch a little tiny bit at idle as the idle air bypass cycles, but it should be about halfway between straight up and the left side, and really shouldn't be bouncing too much, which leads me to wonder about the vacuum hosing. or even the intake manifold gaskets. or the throttle plate isn't closing fully. things like that.

check the condition of the large air plumbing that goes from the air filter box to the turbo and from the turbo to the intercooler, and from the intercooler to the throttle body, may sure all the joints are evenly clamped and there's no folds hidden under things..

another cause of flakey idle is an EGR system.... IF you car has one (they were generally only used on California cars but sometimes leak into other states). Yet another cause of erratic operation is a flakey Air Mass Meter aka Mass Air Sensor. A plugged fuel filter could cause high RPM performance issues.

LOTS of useful info here,
Engine Tune and Performance
and various other articles linked here
Volvo Maintenance Hints for 7xx/9xx/90

 

Hey thanks a lot. I inspected all the vacuum hoses and air flow hoses and found that the large hose going from the turbo to the intercooler had a hole the size of my pinky on the underside near the clamp on the turbo. I was looking up the hoses and wow! it's not cheap to replace them haha. Lucky my local volvo mechanic had a good used one he sold me for 10 bucks. Installing it today, will update if it solves the problem.