I just got a 1998 s70 (not sure which trim) and i just realized my #5 plug hole is almost full of oil. the others have a drop or two (dry) and the valve cover is puddled here and there.
I've read a few threads about this that say it could be my fill cap gasket, but there is no evidence of leakage from there. it's all dry around. Maybe the O ring at the bottom of the cam shaft base mount. I don't know because I've never been in this engine before.

 

Could be that the previous owner spilled oil while adding it to the engine.

 

Clean the oil out and give it a week and see if it fills with oil again.

 

will do. ill let you know.

Also should there be any treatment for the spark plugs?

 

I dont know about any treatment for the sparkplugs but I have a similar issue where I have oil on top of the engine, around the center spark plug well. it seems to be coming from the oil filler cap but I changed it to a new one and its still doing it sometimes.
I'm wondering if it's coming from the black plastic tubing(PCV) that comes along the same way, I doubt it's just spilled oil at this point.

Let me know how your situation goes after a clean up I've done the same.

 

Well, I cleaned it up off of the top and out of the plug well. After driving around for a couple of days, I can see there is no leaking from the cap, the pcv, or the plug itself.
However while cleaning and observing, I spotted a bolt thru the top seated in cheap sealant. I will post a pic when possible, but I think this means a breach in the liquid gasket. (possibly a crappy redo)
Anyway, part of this problem I'm sure is due to a clogged pcv system pushing too much pressure thru.


Feel free anyone to comment if I'm totally wrong.---I'm brand new to volvos and fairly in-experienced engines in general.

 

First thing to replace is the oil cap oring. After that, if it continues happening, it's oil leaking up from yer flame trap kit. (the pcv tube thats right near the oil cap!) These plug up and then leak oil up top, causing pooling of oil in the spark plug tubes.

 

if thats the case what are the options?

 

Replacement of the 'flame trap'/pcv system, which requires removal of the intake. I had it done by a buddy who works at a local Volvo dealer.. not something I had wanted to attempt, never having done one before or worked on Volvos, AT the time..