I just dropped my S40 off to the mechanic, hopefully he can resolve some of the issues.

First and foremost I tried changing the upstream O2 sensor myself, no such luck. The sensor has seized from rust and did not budge. I tried applying a generous amount of WD-40, it did not help. It was also suggested to try using a blow torch. Never do this on an S40! The heat shield above the catalytic converter was not meant for heat from a blow torch, after about a minute smoke was coming from whatever was above the heat shield, cables most likely.
In any case, I did not manage to loosen it.

Second problem is with fuel delivery. When the ignition switch is in the second position, after about 3-4 minutes, when I attempt to start the car, it starts and dies immediately. Basically, when you switch on the car(not start it), the fuel pump turns on for a bit to build up pressure and then turns off. If for some reason you don't immediately start the car, but wait a few minutes, the fuel pressure is lost somewhere and the car stalls immediately when starting. I've also noticed the fuel level sensor showing slightly incorrect information like less fuel, but returns to normal when you restart the car, not some kind of absurdly large deviation, but enough for me to notice.

 

what year is your s40? older models use a fuel pressure regulator (sits on the right end of the fuel rail), newer ones use a pressure sensor that controls the pump pressure. Sounds like the you may have an issue with the fuel pressure sensor.

 

Getting off a stuck O2 sensor can be a real challenge. I like using a closed end wrench and a hammer, if there's room to swing the wrench. If not, you can always use a "normal" deep socket if you cut the cable off (kind of a "commitment thing"), again, if you have room to swing the ratchet. A torch can help, but you want to heat ONLY the manifold, not the sensor. That leaves the sensor relatively cooler (and therefore smaller) than the bung it's screwed into, and the heat can help loosen the rusty interface between the bung and sensor. Oh, and use a small enough torch that you don't melt everything in the area....

 

Sadly this is not the type of car where the sensor is on the exhaust manifold and easily accessible. It's on the cat, underneath the car. So there wasn't much wiggle room. Furthermore any serious twisting action was moving the whole exhaust system.
EDIT:My mechanic has managed to replace it. I bought a universal O2 sensor, a Denso DOX-0119, hopefully it works when I go to pick it up.

It's a '02, with Fuel Pressure Regulator. Also, I am not sure, but I think it uses a returnless fuel line. Please correct me if I am wrong. But the reason I think it's like that, is because I see nothing resembling a return line. The fuel line goes to the fuel pressure regulator. The FPR has a hose for vacuum and obviously the connection to the fuel rail. The fuel rail itself ends to the left where these is a Schrader valve, and thats where I see it ending.

 

pretty sure there is a fuel return line... The problem with the fuel pressure regulators on the Gen1 S40s is that the vacuum diaphram can tear allowing fuel to leak into the vacuum line and into the engine. The problem is most noticeable at a cold start because there's nothing to retain the 45 or so PSI in the rail over night - so you have a cold start with no fuel pressure and you need to crank a long time to let the pump build pressure back up. You may also get a misfire CEL due to the extra fuel running into intake. A simple test is to pop off the vacuum line - if fuel drips out, you're out $200 for a new FPR. Given your symptoms, I'd be more suspicious of the pump itself or the electrical connections to the pump or perhaps the fuel pump relay (which when they fail, its usually because the pump is drawing too much current - which is often a sign that the pump is about to fail). Did you try popping off the vacuum line on the FPR? also try replacing the relay to see if that helps (after all the current one is probably original).

 

As luck would have it today....issues with the new O2 sensor. Apparently, and this was not brought to my attention. Volvo S40 gen 1 use a Titania type oxygen sensor, whereas the universal one I bought is a Zirconia type. There are operational differences between both, what this caused is huge fuel trims in the order of 40-50% and the engine to start dying. After fiddling with it a bit, my car is now in Open loop and System Failure mode, aka "limp mode", before fiddling with it, I would try and accelerate and it would decelerate.

I am now contemplating buying ANOTHER oxygen sensor, that has the correct OEM number 30630130 and is a Titania type. It costs upwards of $100.... As for the original one, it's an NTK 30630130 and has a lot of soot in my opinion. So anyone googling this, on a B4164S2 engine, 1.6 petrol, Volvo use a Titania type pre-catalytic oxygen sensor with part number 30630130.

Are you referring to the little vacuum hose connected between the engine and the FPR? I have not yet popped it off. And honestly, those 45psi are lost within minutes really, not overnight. At least when I tested this with the ignition switch to the ON position(position II) for several minutes(sometimes in rare cases it can happen within 1-2; usually 3-4).

 

yes the small J hose under the pressure regulator can be popped off as a test for any leaks in the diaphram

 

Seems like that will wait. I have developed a new issue. Squealing noise that comes from the area of the intake manifold(not the timing belt). After testing, I saw that removing the oil filler cap removes the issue, however the cap itself has a strong vacuum pulling on it. I work out, and it was VERY difficult to lift it off. As soon as I do, the noise goes away and as soon as I put it back on, it comes back.
I discovered this when I did the 3rd gear clutch test. As soon as I do this, the noise appears. What exactly does trying to go from 3rd gear that causes this? Actually, I've been getting this squealing noise for a while now, but it's only now that I found the specifics behind it.

 

also I recall there was a wiring design issue for the S40's O2 sensors which was fixed with an adaptor. Google other threads to see if you can find some more info. If I am right, the adaptor should allow you to keep the existing sensor in place.