Early 200 series cars up until halfway through model year 1984 use a different glow control system than the 700 series: 700 series has one large GP relay under the hood that serves as the switching relay and the timer/controller, all in one unit, while 200 series uses two separate relays -- one under the hood, which is a simple "dumb" relay that just switches power to the plugs on and off on command, and a second relay under the dash (Volvo's name for it IIRC is "blocking relay") which is the one that receives the temp signal from the sender in the head and controls whether the underhood relay operates and for how long. The very last run of 240 Diesels imported here (sold as 1984 models, but on dealer lots during model year 1985 and displaying a variety of changes that were in evidence on gasser models badged as '85s, therefore in reality a "1984.5" model
) featured a much-reconfigured electrical system featuring the same glow control arrangement and single large underhood "combination relay" used on the 700 series.
The blocking (i.e. control) relay on the earlier 200 series is a yellow rectangular relay hanging under the steering column, and given the description of your symptoms an issue with it or the connections to it would be a likely suspect as far as a cause of erratic glow plug light/glow system function.... might want to start by looking there, if it's hanging half out of its socket or has corroded contacts, etc, could give you an easy solution.