Yes, you will have problems. The new engine has a 14" flywheel. The flywheel cover will not fit over the 14" flywheel, the 225 has a 12". You will also need a flex plate for the flywheel. Front mounts will not be a problem, they should bolt right up.
Don,... While most New motors come with the 14" flywheel,...
The 12, 3/4" flywheels Are available, drilled for the coupler, for the 3" crankshafts...
Click here,...
Would that be the Simple fix for these Volvo issues,..??
I would guess you would also have to replace the starter, and depending on the bolt pattern, the old flex plate would be needed. The older Volvos did not have couplers like Mercs have.
I Assume, Volvo uses a standard pattern for their flexplates as well,...
I was more concerned with the front engine mount location being that the original block was a '77 GM 305.