I have close personal friends who are Volvo fanatics, and this is completely normal. I don't think you are being taken advantage of. Good Volvo mechanics should be put on retainer, since Volvo owners will likely need their services on a routine basis.
You're in a tough bind. You authorized $1,000 worth of work, agreeing to pay the bill when the work is complete (not unlike our nation's commitment to pay its debt). Now something else is wrong with the car, and you claim you can no longer afford to pay $1,000 for a car you cannot drive. You aren't a member of the Tea Party, are you? Tea Partiers would probably just ignore the bill and abandon the car. (I am just kidding!) Unfortunately, that's a risk you take. If there are two or three things wrong with your car, and the first thing you authorized the mechanic to fix doesn't fix it, the mechanic has done nothing wrong.
You have already committed to pay the $1,000 bill, so in my opinion, not paying it isn't an option. If you can't afford to have the rest of the work done, perhaps you should apply for a Goodyear, Firestone, or Sears credit card. (For the record, I don't recommend using Sears, but in this case, you seem desperate.) They often have 0% interest offers for big ticket items, so for a bill between $2,000 and $3,000, you might be given a year or 18 months to pay it off at 0% interest. However, if you don't pay off the bill before the deadline, they will hit you for accrued interest from the date of purchase, and that interest rate is usually pretty high, so don't do it if you can't pay off the balance by the expiration date of the 0% interest deal.