Think if and where you've been working on the car just prior to it happening, because it could narrow down where to look. e.g. If you accidentally sparked on the back of the alternator with a tool, when removing the oil filter... or recently jump-started the car (or another car with yours), or flexed any wiring on/under the car.
e.g. It could be a shorted diode in the alternator. They have a pretty hefty PIV (peak inverse voltage), but obviously manuals say to remove the +ve battery terminal for a reason. (I don't bother doing it either, btw. But I should know better.)
Could also be a stray wire behind the switch hanging down and touching where it shouldn't. Or just a faulty ignition switch (fitted behind the key). And the usual crumbling wires that go from the alternator, under the car touching to earth.
Read here too:
https://www.matthewsvolvosite.com/forums/viewtopic.php?t=22327
https://www.matthewsvolvosite.com/forums/viewtopic.php?t=56816
http://www.volvo-forums.com/t31545-oil-and-battery-lights-remain-stay-on-when-key-is-off.htm
http://volvoforums.com/forum/volvo-240-740-940-12/problems-battery-light-alternator-34054/