I'm not sure I understand how your problem arose, but Stuarts problem is deffo the result of the viscos coupling. I suspect the viscos bit allows for a slight degree of difference in rotational speeds which are non- continuous. ie driving on a normal road - sometimes the road is straight, sometimes bends left/right. This type of driving allows the coupling to remain temperature stable. However, a continuing bias due to wheel diameters being different causes temperature build-up which cant be dissipated - hence the problem.
IIRC Volvo were not the only manufacturer to have issues with 4x4 viscos couplings - Vauxhall Cavalier did too, the 4x4 model actually being withdrawn.
I suspect if Stuart drove his car for any length of time around a tight roundabout he would experience the same issues.
Good luck with the council - I got paid up by Northumbria CC about 18 month back - I did however provide them with detailed pictures of the hole responsible - (along with measurements,)and the slashed tyre and I only claimed for the %age of unused tyre - something like 5mm. I even worked the 1.6mm "wasted" tread into the equation. Told them it was not fair to claim for a new tyre when the damaged tyre was part worn. Paid up in less than 10 days.
Cheers
Bob