Checking the Sealing Ring
WARNING: This page is about a different car, the 2002 Volvo C70, 2001 Volvo C70, 2000 Volvo C70, 1999 Volvo C70, and 1998 Volvo C70. However, it is still accessible from the selected car via links, so may be relevant.
Check that the sealing ring in the gearbox end is undamaged.
Replace the sealing ring with a new sealing ring if damaged, see Remove the Drive Shaft Seal and/or Install the Drive Shaft Seal .