Lost power steering

oil level is just below MAX

Not too sure, but is there not an electric motor in there somewhere? I mean, the power assistance is not purely hydraulic. Perhaps your problem lies there.

My S40 diesel has elecrtic power steering, so does not run off the engine belts (this is supposed to improve fuel economy) so as 7050man said, looks like the electric motor has died, or the connections to it have passed away somewhere. I wonder where the system gets its input from, and also where it gets its feedback? I'd be tempted to have a grovvel round under the car with the undertray off and look for loose, disconnected. chaffed wiring etc.

I had to have the pump replaced under Volvo's TNN64-22-2006-05-19............. which they coverered no cost of.. Does anyone know where can I get a copy of this bullitin?