Failure mode of a turbocharged Volvo Redblock?

B230FT is common and easier to keep spares for.  It has all the improvements to make it last under well managed boost up to about 9.5 PSI (more is possible but headgasket life expectency goes down).  It only uses a single knock sensor and they are sensitive to correct torque and orientation.

The 1993+ 940 B230F is less common but splits the difference of a high compression ration, availability and has the oil-squirter block.  They take about 6.5-7 PSI reliably but the pool of those that have used them boosted for endurance race is either small or non-existant.  Most of the same warning as for the B230FT.

B23 is the stoutest engine Volvo ever made but hard to find, parts are much more expensive and the gains just are not worth it.

B230FT's on the street average about 180K per head gasket so even though they are the weak link, that link is still strong.  Head studs mentioned are cheap insurance but I have never heard of one of the headgaskets failing do to insufficient clamping force.

Volvo intercoolers from the B230FT's were all stolen from from the PnP's for other people's ghettocharging projects because they are large and well built.

I have only raced my 740 wagon with B230FT twice, but I have had two failures.
I was running stock boost.

1. Wiring - the 80s wiring is biodegradable and sucks.  I completely eliminated all unnecessary wiring and fixed any crappy splices, wires and connectors after our first race. We were losing power in the corners and I think it was from a crappy splice in the hall sensor cable.  If you are using any part of the stock Volvo wiring harness, I suggest you check every wire.

2. Waste gate studs were backing out completely.  After an hour of racing I would find studs missing, not the nuts!  I don't know why they were backing out, but I safety wired every stud together after the turbo.

After that I did one 24 hour race with zero issues that stopped us racing.  The M46 transmission overdrive did not survive the race and slips in reverse and downshifts.  We are putting in a different transmission to replace it now.

As mentioned your tune will be important with megasquirt. Running conservative timing means extra heat into everything if you go too conservative. Too much & detonation means your engine is done and it's replacement will be done quickly as well. Similar thing happens going too far rich or lean -> detonation.
With a good tune you should be able to make more power than a stock tune safely.
Don't forget colder plugs if warranted for power levels you're pushing it to.
If it hasn't run in a while the injectors may be gunky.

I SWEAR there is a sweet spot(s).  Mostly 1987+ to 2001 or prior to 1981.  really...promise.  780 and 260 excliuded.