I was wondering where the fuel filter is located in a 1989 Volvo 240 DL station wagon

I believe it is attached to a support bracket for the dash behind the glove compartment.

D24 and D24T diesel enginesEngine Firing Order: 1-5-3-6-2-4

it should be located under the car below the drivers seat. it will be a silver canister, like an oil filter

Fuel pump relay,controls the power to the system,its an small wt box mounted under dash on P/S foot well.

you may want to check the fuel pump relay. this is a common problem

Replace engine oil and filter, air filter and fuel filter.
Drain the fuel tank and add fresh fuel.
Remove the spark plugs and put a squirt of oil in each cylinder. Remove coil lead and crank engine until oil pressure comes up.(light goes out),
replace coil lead and start engine.. it will blow smoke for first few minutes. Check trans fluid, brake fluid etc before driving. Theres a good chance the brakes will need an overhaul.

I had the same problem with a 1989 Volvo 740 GLE station wagon. I did the same thing you did. But this time I talked to the local Independent Volvo service shop, not the dealer. The problem turn out to a bad fuel pump in the gas tank. You can replace it from inside the back of the station wagon. Just remove the floor panel to access the top of the fuel tank. But before you do; note that there are two fuel pumps, one inline underneath the car on the drivers side, and the one inside the gas tank. Before, you replace any of the fuel pumps check the fuel pump relay behind the astray on the left side. It could also be a bad relay.

chips wont do much for this car

Remove your oil cap, try to start,look inside to see if the cam is turning,if not your timing belt in broken.

I tink you have to replace the catalyst for better acceleration probably is blocking the combustion that's what you loosing power, I have 240 wagon 92 and i just did it. my 184k miles good luck.