Neat writeup and clever fix!
Interesting Volvo Diesel trivia fact: the dual-tank setup only came on very early 760 TD sedans. The early gasser V6 760s didn't have the upper tank (the one mounted in the trunk, above the rear axle just behind the seat), and neither did the diesels from '85-on. They only had the tank underneath the floor, and of course that was all the wagons ever had as well. It was only on the '83-'84 764 TD sedans that you could get the extra tank, which gave the cars almost 20 gallons of total fuel capacity! Volvo must have meant the diesels to be real long-distance cruisers, since with 20 gallons on board and 30 mpg hwy they have a range of 600+ miles on a single fill-up.
Only drawbacks are you don't get the rear-seat ski pass-through flap because the upper tank blocks it, and you lose a little bit of trunk capacity. The range is nice, though... When I drove my '83 764 TD from Seattle to the SF Bay Area and back last summer, I only had to fill up twice!