JB, very likely the PDS bearing is gone. This will be the single bearing on what's called the Primary Drive Shaft.
The PDS is inside of the Flywheel Cover (aka bell housing in the auto world).
NOTE: In the thread that Chris linked us to, the Volvo Penta exploded view shows the V-8 "double bearing" PDS.
The double bearing PDS will not remove from AFT without engine removal.
Yours will be a single bearing PDS...... (baring no rust or corrosion issues) these can be removed from AFT without engine removal.
So basically, there is no reason to remove the engine for PDS bearing replacement on the OHC 4's.
Drain out drive oil, tilt helmet up, loosen bellows clamp, remove drive transmission ONLY.... and watch carefully for the shims underneath the transmission.
These must all go back in!
Go
here and read up on PDS removal in one of the links via
Volvo Penta AQ series frequent Q's & A's by myself, or
Volvo AQ Drive and PDS Bearing Info by rkcarguy.
Pay particular attention to the modified extra long needle nose pliers that you will need in order to remove the large snap rings.
This should walk you through the steps necessary to replace this bearing.
NOTE: to the best of my knowledge, there is no manufactured snap ring pliers that work as well, or as easily, as a modified extra long needle nose pliers.
The cavity is just too deep for any regular snap ring pliers to work.
Just gently round the tips, tweak them inward slightly so that they will not slip out of the snap ring eyelets!
For your OHC 4, this is a single standard Koyo or SKF 6206 bearing that can be purchased from a bearing supplier (save yourself some money).
NO Chinese bearings!
BBQ'd Pork and Fried Rice.... yes, but no bearings from China!
Your PDS will look like this, but will very likely sport fine splines for the female drive shaft yoke (course spline being shown here).
But if for some reason you do pull the engine, best to separate the engine from the F/C and lift it out.
Your engine is likely cantilever hung...., which means no front engine mounts.
If you have trouble, post back.
BTW, in 1985, you likely have a 275.... not a 270.
.