This is a tough one, because of the time lapse between the service and the incident. I'd hate to be the referee on this one during a mediation hearing!
Couple of suggestions and I hope they don't seem "lame"--
1. Could you possibly claim this under a road hazard clause in your comprehensive insurance policy?
2. you could write/call the Volvo Zone Office and explain the situation and ask for "factory participation"---maybe they'll do something like a 50/50 goodwill split. It's not all you want but given the vague area of responsbility here, it's better than nothing.
3. Consult an attorney and try to make the dealer's "errors and omissions" insurance pay for it.
I really doubt that the Volvo factory would honor this as a straight warranty claim.
I can also tell you what the other side will say:
1. cap came off because someone else touched it and put it back wrong
2. owner didn't stop when red light was on, and the reason the temp gauge didn't show HOT was because the coolant was already missing---a temp gauge cannot read "steam" (which is true, it can't read when the cooling system is already empty).
I'm really sorry this happened to you---it's a very tough situation to deal with, but given that the stakes are pretty high, you're going to have to summon up all your patience and negotiating skill to try and salvage all or part of it.