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You have to flip the bottom of the rear seat forward. There should be a strap to pull where the seat bottom and seat back meet. The seats will not fold all the way down with out flipping the bottom up first.
Look at the socket? Are there two contacts? If so, 7528 (or 1157, same thing) is correct (and that's what the parts catalog will show). However, in the case of my 1991 740, there is only one contact in each socket. If that is the case use an 1156 bulb.
I spoke with an expert Volvo mechanic and he told be Volvo used two different tailight assemblies, a Hella and another one I can't recall by name. He said there appears to be no rhyme or reason as to what car has what, and this is the reason for the discrepancy in the proper bulb. The only way to know for sure what you have is a visual inspection on the unit.
Was the car primarily in a Southern state--no winters? If yes, it could be the wiring harness that leads to the rear wiper/stop light inside the rear tail gate. They usually break at the flex point, and short to the frame.