Hi, I've got a 340 GL 1.4 and the back of the diff is covered in oil. Is this likely to be the diff cover gasket? Or will I have to make a further inspection to be sure?

Noone can know for sure without further inspection, so clean it up and look for where it is leaking, also check the level and refil if necessary if you are not repairing immediately.

But yes it is likely to be the rear cover, it could have holes in it/be warped or just need a new gasket. The cover is steel so you can weld it (carefully) if needed. Gasket are NLA but you can get a kit from mac including nice Stainless bolts ;

http://www.volvo300mania.com/forum-uk/v ... f=5&t=3549

Check the bolt holes are nice and flat, as they tend to get pushed into the gasket around the bolts.