Volvo: 2000 volvo s40 issues, 2000 volvo s40, oxygen sensor

Question
this is my first post and i'm hoping to get your inputs on my issue.

we bought a 2000 s40 with 88,000 miles on the odometer and noticed that the check engine light turns on intermittently. the dealer said that there is something wrong with the oxygen sensor and that they'll pay half to repair it. we went ahead and got the car. after a month's time, the car started to make weird noises like it had one of those drag racing mufflers. we had the car checked by volvo (which costs over $100) and they said that there was something wrong with the exhaust and that might be the reason why the check engine light turns on. they said that we have to pay at least $1,500 to replace the catalytic converter but that does not guarantee that the check engine light will finally turn off. i really appreciate any ideas.

thanks in advance.  

Answer
Hue,
Not knowing the code that was stored in the control unit leaves me at a loss. However if the code was in reference to a HO2S (oxygen sensor) it is entirely possible that replacement of the broken cat will fix the car. Is this break in an area that can be welded by an exhaust shop? You may want to try and see if a exh shop can help, with the exhaust noise, but they most likely will not be able to reset the light. Another trip to the dealer maybe in order.