2 weeks ago I did an ADHD fueled deep dive on exactly this topic because I am working on a buddies boat, that he bought last fall, and it is my first go with a Volvo Penta outdrive. Just my 2 cents worth of research, but not personal experience, so take it as you will.
For the ones that decided to use non VP oil, the LS additive was a NO NO because of the cone clutch. Seemed a lot of them used the Quicksilver gear oil used in the Mercs, and judging by the greenish color of the oil in my buddies SX-M outdrive, the previous owners did also. I have another lake buddy that is one of those that is meticulous about his boat (one of the worst/best that I have seen), but he said that he has tried using other oils because of the VP cost but he said it doesn't shift the same and he wont use anything else now.
I am cheap, and will normally use ALT products rather than OEM, especially with oils, but I read enough people that had issues with using non VP gear oil, that I opted to buy the VP oil for the outdrive off of amazon. Some oils become bon-fire starters or seals lubricant with anything less than half a quart but definitely not VP Gear oil at $35 a quart, it will be saved for next season.
