Ive owned several Volvos over the years, 240's, 850's 760's, 740's, one horrible S60 and ive only kept one of those 760's up over 300K. (332k)
It died on the road due to over heating. A plastic valve for the heater cracked and i didnt notice the temperature gauge creeping up and it overheated and the rings lost compression.
With this XC70, it seems OK, I change the oil every 4-6K, it burns a quart every 1500 or so, still has decent power......
but gosh.....300k? I put about 45K on in a year.
Do you think it's time to sell it off and look for a fresher one? Or, is a 5 cyl Volvo OK good up to 400k?

 

Are you asking if its worth repairing an engine that has issues after overheating or are you asking if its worth keeping your car for another 100K? I assume when you say the heater valve failed, you lost coolant allowing the engine to overheat? Usually overheating will warp the head allowing the head gasket to leak. What tests have been done to confirm the fitness of the engine? Did you repair the heater valve and check to see if its consuming any coolant?