Engine Seizure on XC90

Hi - I'm new to here and just wanted to pick some brains! My wife bought a 2nd hand XC90 D5 (54 plate) last year from a franchised dealer. About a month ago, the oil light would flash on when she drove around a corner, and then disappear when the car straightened up. A week ago the engine started knocking, and on the way to the dealership was down to about 30% power. The engine is apparently seized due to lack of oil, the 4x4 system is not working, and the intercooler is leaking. Only the 4X4 system and intercooler is going to be covered by the warranty, leaving us to pay for a replacement engine. We have now found out that the franchised dealer did not complete a full service as they promised (they also stamped the book to say it had been completed!). Would that lack of service lead to this problem? And is there anyway around paying 6k for a new engine to be fitted? Any suggestions would be gratefully recieved.

with all due respect if you have been driving around for 3 weeks with the engine oil dangerously low and knowing about it as the light was coming on then this result must be expected .. the oil light is a last resort warning it is not a level indicator , it indicates that there is NO oil pressure at all . No one else can be to blame even the dealer who may or may not have changed the oil ... as mentioned above best get a used engine and get someone to fit it for you . Then check the oil level weekly .. If the dealer stamped the book but did not complete the service thats fraud .. go to another dealer and get them to check volvo's history see if it is entered on the system ...

Sorry for highjacking this thread. Not that I would need a replacement engine, but what would be the cost for a Euro IV recon replacement D5 with 185 BHP including fitting?

As stated above oil/water/brake fluid/power steering fluid/windscreen washer levels are the responsibility of the vehicle owner not the dealer, and on top of that you have been driving the vehicle knowing that the oil light as been flashing at you to indicate there is a problem yet you have carried on driving regardless, in my book deserve to have your wallet lightened .

Likewise, although I am mechanically capable of just about anything, I still check my oil weekly, and do a visual on the water etc. I actually can't believe that the XC90 doesn't have an electronic dipstick - Even a 2002 Laguna has it as std.... Mind you, the XC doesn't even have brake pad wear indicators, something that is really not good on a so called "Premium" car... Mike