jamieblack

My first bit of advice would be to take it for an MOT. That will give you a fair idea of what condition the car is in. It can be hard to get the full picture without a ramp.

Check for rust under the sills, esp near the rear spring hangers.
An idea would be to lift the carpet next to the front door hinges and check the sills from the INSIDE. The reason I say this is because mine had rusted from the inside and eventually gave way when I jacked it up.

Gearbox mounts, mine fell off even though the car only had 68k.
Wheels bearings, esp rear, they are expensive to get done.
Suspension arm bushes, any play?

The chances are that the engine is OK, an engine flush followed by good quality oil should help it + sparks, filters etc

Brake parts are fairly cheap, but take the wheels( and drums at back) off and check them out.

Check the subframe under the engine. Is is rusting away unseen?

RE: dashboard lights, are you sure the things actually don't work? From experience I can say Volvo electrics can be pretty dire and half the time the lights don't work as they should.
If you can get it through an MOT without spending too much, go for it. These cars are very reliable, strong and fun!. Rear wheel drive and a 2litre!! He-he

My F-ref inj gets 28mpg aroud the doors, 38 on motorway.
Cheap to insure too.
I think it had a similar life to yours, it seems to have sat for a long time, corroding away underneath.

All the best and let us know how you get on,