I took off the engine covers and the moved the inner wheel well shroud on the passenger side to see where oil was seeping from. It's definitely the valve covers! It looks like a very involved job. The Intake Manifold will need to be removed (will need new gaskets once removed) amongst other things. The question I have is, while I am doing this what other parts should be replaced? Anyone that has done this, please let me know what to look out for!
thx
Not exactly "quick reply" but its not a quick job

I assume you've taken an inspection mirror and traced the oil leak all the way unto the gaskets? A clogged PCV though rare can cause higher crankcase pressure and force oil out of the VC gaskets as well as the crank seal ... For the VC gaskets, if you have basic tools and some experience this is a straightforward job, the key tool here though is patience as there is quite a bit of disassembly to actually replace the gaskets.
Take photos of the assembled areas first for reference on re-assembly, as I'd recommend stretching this out over 2 days first disassembly day 2 new parts / reassembly The gaskets are inexpensive it's the labor which determines the high price at a dealership or indy as there's no getting around it. The intake manifold needs to come off so while you're there, replace the fuel pressure sensor ( PN 31272730) as you will have to sooner or later -
The nifty engine covers on the V8 looks nice, but trap a lot of heat so if you're due for gaskets by now, every hose, wire and plastic connection is going to be brittle. There is a PCV crankcase breather hose running from one bank to the other, this was very brittle I'd suggest you buy that as well-( volvo PN 30720098) since you'll have the coil packs out I'd also replace the spark plugs I'm an OEM guy when it comes to spark plugs on this engine since unless there is something very wrong combustion-wise the original NGK's (branded volvo) work just fine and come pre-gapped, but do check them before installing and remove them in order and take a photo of them for later reference if needed. The other component worth considering while you are doing this job is the power steering pump. If it's whining or otherwise making noises I'd replace it while you've got things apart and accessible. Also while you have the plenum off I'd replace the sure to be brittle PCV vale hoses and PCV valve. the last parts I 'd consider replacing are the accessory serpentine tensioner, rollers and belt since you'll have them released, ( releasing the tension load is a critical job and should be done with very very even incremental torque if you're not replacing the tensioner. All n all these part in total are not cheap compare to the 100 or so for just the gaskets but it will give you peace of mind on those long trips if you know it's been done there are lots of DIY's around for them as it's a straight -forward job for all. if you bite the bullet and replace all of the above it will be more than you're planning on but it's several thousand $'s of work at a dealership as most will need the intake plenum removed at a minimum and all are easy to do and will put many more miles on your engine. *These recommendations are predicated on not having maintenance records to document replacement and no knowledge of your milage if you have had these parts replaced already all the better.
As far as parts you'll need new upper and lower intake gaskets and the valve cover gaskets for the front and rear banks as the others have suggested get the solenoid seals as well I dint replace them but you may need them - here is a parts link with the diagram you can buy them anywhere FCP volvo webstore is good though -http://www.volvopartswebstore.com/products/Gasket/1111302/30720335.html
Here are a few process tips I found while doing my gaskets if you follow the chitons ( I bought a one month subscription - http://www.chiltondiy.com) as up to now I haven't needed to buy a VIDA disk 't's should give you all the picts and steps:
Tighten bolts/nuts to specification as follows:
Tighten valve cover mounting bolts to 7 ft. lbs. (10 Nm).
Tighten ignition coil mounting bolts to 7 ft. lbs. (10 Nm).
Tighten all bracket nuts to 7 ft. lbs. (10 Nm).
Tighten intake manifold bolts to 14 ft. lbs. (19 Nm).
- I suggest only OEM gaskets not much more than aftermarket and the fit is best.
- I replaced the crankcase breather hose between the heads as it was very brittle due to heat, I also replaced the hose from under the upper manifold to the PCV valve and new PCV valve it's easy to do this now and if the pct needs replacing this hose gets cracked and brittle as well and is a pita to get on without removing the upper manifold
- Put a towel or masking tape over the intake ports as soon as the lower manifold is removed to prevent debris from entering leave it there until the manifold is back on, there will be some valves open enough for debris to get into the combustion chamber
- I unclipped the injectors from the fuel rail and pulled it up using slow even pressure, leaving the injectors in to prevent tearing the more delicate lower o-rings then taking the upper o rings out of the rail and setting them aside. I lubed them with vaseline on the install and set the fuel rail on top of them then used even pressure to seat them they're in correctly when the fuel rail lines up with the bolt holes and sits flush with the manifold
Be very very careful with the coil pack connectors as these wires are very small gauge and brittle from heat, this is where having a helper pull and hold the connectors back just enough to release so the cover will clear while you remove the cover is best
- The biggest pain is getting things clear to get the actual covers off. I lubed the black connectors with silicone spray so they would slide off, there is an audible "click" when they are removed and installed . The front cover is relatively easy, I used an inspection mirror to look at the bolts in the rear cover I too had a'welded" ground" cable I used an old thin 10mm wrench on the lower nut and a ratchet to unlock the top - Removing the cover over the rear cover coil connectors was a pain as well, the fuel line can be disconnected but I was able to pull the hoses out of the clips I broke a few and gently push the two metal fuel pipes back far enough. A second person to hold the harness and fuel pipes while you lift and move the cover off/on is best.
- The valve cover bolts have a rubber grommet and top brass washer - these are separate- remove the washer before removing the cover as they can can come loose if so have a long magnetic retrieval tool handy Same with the install remove the washers and slide them on the cover bolts after you install the gasket. The gasket is designed to cover a small portion of the head surface I installed the gasket into the covers on the bench using some light vaseline to hold it in the OEM fit was good so this might not have been necessary
On the rear bank make sure to go around the back side with the inspection mirror to ensure the gasket didn't reposition when it is installed. You don't want to have a leak after all this work!
- I used a normal criss-cross torquing pattern to ensure even application of the gasket after I snugged the bolts all around.
- I use styrofoam soup bowls to hold parts they're easy to label with the part and # of nuts bolts as you remove things
peter