RE: Headlight fault
Hi Bob
the "step relay" converts the operation of the dip/main beam stalk which is "intermittent" (ie it returns to its original position as soon as you let go, unlike most cars where there are distinct dip and main positions) into the two steady states for dip or main. It "steps" alternately from one state to the other each time it is pulsed by the dip switch. Don't know exactly how it works, mine does so I've never had to investigate. I could give you chapter, verse and circuit diagram for the famous fuel pump relay but that's another story!
Burnt wiring sounds unpleasant- it could be due either to overloading or more likely since it should be fairly conservatively rated (most car systems are more concerned with voltage drops than limiting current ratings for cables) there will be mechanical damage or a bad connection nearby- perhaps a failing contact in a relay socket or inside the relay itself. This might well have caused collateral damage (nice euphemistic military term, that) to your headlamp circuit.
Running low on any specific advice here- I'm not really familiar with the headlamp circuit itself. Afraid I haven't got anything better than Haynes myself though I think there was a recent reference by someone in this forum to having something called a "green book" which sounded like some genuine Volvo document.
Chris
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