Bought this 1999 S70 last year on the cheap since it needed plenty of work - control arms, upper strut bushings, timing belt, water pump, some cooling hoses, thermostat, heater core, tires, motor mounts, drivers side door check strap, PCV, IACV, front O2 sensor and a good cleaning. Finally got it together after months of repairs and started it last week. Some engine knocking initially but once it warmed up it ran rather nicely. I've been driving it around town to get the old gas out of it since it was sitting so long (maybe thirty miles). One issue that I did not notice when I first got it is the car appears to be eating anti-freeze at a rather fast rate. Every time I drive it the low coolant light flashes on and I have to add some anti-freeze to the reservoir. I've checked the tail pipe and no white smoke, checked the oil dipstick and the oil appears to be very clean, checked the overflow tank and all I see is nice green fluid and no fluid on the ground after it sits in my garage. Temperature gauge shows slightly above the three-o-clock reading (90 degree thermostat) when warmed up. Will a compression test on the car to check to see if all cylinders have similar compression reveal a bad head gasket? What else could be wrong? Air in the system? Test procedures to follow?

 

A compression test would be a good place to start. It'll at least tell you if you have a bad cylinder, but won't tell you if it's a head gasket, rings, valve seats, etc. A leak-down test would help you pin-point it more, if it's something in the cylinder.

Another route would be to pressurize the radiator and see if you can see it leaking anywhere.

Beyond that... it could be possible that you did just have some trapped air in the system and you're flushing that out.

 

Thanks that's what I'm thinking - pressurize the cooling system to check for leaks. I haven't checked real close on the inside of the car where the heater core is connected but I would think I would smell the fluid while driving the car.

 

Your best bet is to find a local radiator shop and have a coolant gas test done. It takes maybe 10 mins and will 100% confirm or deny a head gasket leak.
But also look hard for any external leaks, especially in hard to get places. White stains on the block is a good tell tale.