Turbo is out on my 2004 Volvo S60
The turbo on your T5 is over 10 years old. Might just be time to get a new one (not sure if they rebuild these things or what).
jamnblues, I had a 2006 Volvo S40 (thankfully without the turbo..because the car is now driven by my Mom). I had to ante up $85.00 to have my local service shop replace the cabin air filter, since this requires the removal of the brake and accelerator pedals to access the darn filter!! Lord only knows what the Volvo Dealer would've charged...probably more like $250-300. I don't even to even think about what a OEM replacement turbo (parts & labor) would be!! May want to consider cutting your losses and trading in the car @ Jacksonmarie, unless you can get the turbo on the cheap and have a service shop that won't rob you blind!
I'm almost positive that you can buy a rebuilt turbocharger for a couple hundred bucks. Just make sure it's the right one.
Looking for a Used S60 in your area?
CarGurus has 8,040 nationwide S60 listings starting at $1,988.
Search Volvo S60 Questions
Are you a UK consumer? CarGurus now has a discussion forum in the UK.
Volvo S60 Experts