Find a way to contact Volvo North America and ask them if the tranny needs replacement for a solenoid failure as the dealership indicates. Name names.
Sounds like the mechanics are working on a commission bases and needs some extra Xmas cash. Ask for a written quote stating the trans needs replacement due to a non availability of parts. This puts the dealership on the spot to then back up what is in writing if a problem arises later ( or someone pushes the issue in court). It is impossible to explain in court why something is different than what you wrote.
Stay away from Nation wide Trans shops and at this point even the dealership if they change their tune. Take your business elsewhere and let your giving dollars to someone else instead of the dealership talk loudly. Also let Volvo NA know that you are dis-satisfied with the dealer.
Search for an independent Vovlo mechanic in your area or a reputable local trans specialist. One indicator of a good trans mechanic is the shop is really clean. Almost tot he point you question that they have any business at all. Dirt and automatic transmissions is trouble compounded.
All parts are not made by the auto company themselves. They contract with other companies to have them made for them. I'm not familiar with the 70XC series, but Borg-Warner(sp?) and its Eastern arm Asian-Warner(sp?) provided trans for all the Volvos with a 200,700, 850, and 900 designation. The same Asian-Warner in my 245 also was used in a lot of Toyotas with a different bell housing. I can get parts from about nine different places, including the Toyota dealership if necessary.
After market parts are available through specialty providers. The independent mechanic does not necessarily have to go through the dealer. And a dealership is not going to be able to BS someone who knows about transmissions.
Duane