I have exactly this issue with my 2005 D5. 'Brake Failure - Stop Safely' message on dash and all dials go down to zero, warning lights, limp home mode, wont start for a time etc. etc.
Took into Volvo specialist garage (not main dealer) got fault codes read, and there were loads of codes seen.
All codes were reset, and one remained - brake position sensor.
Changed that sensor and the car was ok - hooray! it was fixed.
Then 2 days later it happened again!! Damn. Back to square one.
Took back to garage - and they now cannot conclusively find a cast iron problem to sort out. Could be this, could be that. Not sure what to do now as I can see its going to get expensive.
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