We never saw the LT here, so the only place we ever saw the I6 was under the hood of some Volvos.
The US military owned a few D24T engines in Pinzgauer 718 6x6 trucks too.
Must have made their 6.2L Humvees feel like hot rods by comparison.
My 5 cylinder diesel from 1983 bolted up to 016 and then 01E, so the BHW engine should be able to bolt up to the Volvo transmission. I'm not sure much the 1984 Volvo automatic had to electronically communicate with the engine though. It might be easier to do what Oilhammer suggested and get a good Manual.
No. Unlike those Audi transmissions, the Volvo trans (both of them -- the auto and the manual) are drilled only for the 6cyl pattern. BHW or any 4cyl TDI definitively will not bolt up to them. The Volvo is a fully mechanical ZF trans if it's an autobox, but you can work with that, hook the kickdown cable to the accelerator in the cabin if you're going electronic, etc. The shift points would be a little high for a TDI coming from the prechamber engine that likes to rev more, but not bad. The diesel automatic Volvos had 3.91 axle gearing so you could help it there with a TDI by swapping to a 3.54 or 3.31.
IMHO the obvious first choice if you wanted a TDI in place of fixing the stock engine in the Volvo RWD platform would be a 2.5L 5-cylinder TDI from a Euro market C4 Audi or T4 van. Easy to get one imported, QGAP in CA has them on the shelf and Frans can ship them also, probably others. Simple older engines with simple wiring so it'd be easy to adapt for electronic control, and if you got an engine out of an Audi you'd have it already laid out in longitudinal format, or you could have an m-pump built, it's been done both ways. The engine is configured in a highly similar way to the stock D24T engine as Oilhammer described earlier, so it would go together with much less head scratching and adaptation than a 4cyl would.... things like front engine accessories, plumbing, etc would be in many cases a direct fit. The back end of the engine would bolt right up to whatever you have now -- bellhousing, flywheel or flexplate and TC, etc. Shorten the oil pan and pickup tube you already have from your stock engine by cutting sections of both out, and it bolts right up, giving you the necessary rear-sump setup ready to go and no challenges with crossmember clearance. It's not quite a drop-in job, still have to come up with mounts and some other adaptations, but pretty close. And you get the extra power and calmer NVH of the 5cyl engine, in an engine bay with plenty of room for it. Better than a 4cyl in every way, and much easier. Look around, it's a relatively common Volvo swap overseas in your exact situation.
Probably cheaper too -- of course getting a 4 cylinder TDI donor car would be cost less upfront than getting the 5cyl engine, but with the 4cyl, you then need to also source a transmission, adapter plate, adaptations at the driveshaft, transmission mounting and shift linkage, oil pan rework for crossmember clearance (IF you can resolve this conflict at all with the ALH or BHW style where the pump is hung low at the front of the engine right where the crossmember wants to be -- AHU or 1Z with oil pump set back towards the rear would be easier on this but have their own shortcomings, and keep in mind that on a Volvo 7/9 series the steering rack mounts INSIDE the engine crossmember so xmember modifications are out of the question).... and a million other little nickel and dime pieces to make it all work in the car. Bolting up to the factory trans and making use of as many factory fitment solutions as possible is a different world not just in effort but also in cost.
Or fix the stock 6cyl. They are great engines too, as long as you don't overheat it or blow the front timing belt. Extremely smooth and quiet runners with great power and sound. Keep in mind that moving from the inline six to a TDI 4cyl, in a longitudinal mounted platform, will mean adding a very large amount of vibration. The car will be less pleasant to use. The 5cyl would be less of a sacrifice.