With all do respect, I think I may have answered these questions in obviously not too clear a manner.

The same day and prior to taking my XC70 to the dealership, I did in fact get the transmission fluid replaced at the most reputable transmission shop in Ottawa - B&N Transmission. As I stated, on the Volvo mechanic's advice I had planned to have the transmission oil replaced around 100,000 km. The fluid seemed to be OK and no other damage was found.

Having ruled the transmission out as a cause of the mysterious noise, next I took the car to the Volvo dealership. I had already noticed the green grease on the CV joint bellows and had been sent an extended warranty letter regarding defective seals in the steering rack. I was relieved that the Volvo mechanic did diagnose a defective rack seal and was happy to hear their solution was to entirely replace the steering rack and then do a front alignment.

So, I considered myself lucky to have this repaired at Volvo's expense and wanted other XC70 owners to be aware of this extended warranty repair. I seem to recall the rack would be replaced for up to 8 years of age on the XC70 but there may have been a mileage limitation.

Hope this helps to clarify my experience.