tried everything misfire 02 s60 2.4 t Help!!!

Well for the past week my wifes s60 has been misfiring pulled codes p0305 changed plugs w/new volvo plugs no change new coil no change swapped coil with different cylinder same code swapped injectors to different cylinder same code also checked compression even on all cylinders i have cleared the code each time and also unhooked battery for a hour to be sure but i still get p0305, check engine light does flash and engine does misfire @ idle but above 4000 rpm it seems to smooth out and the light just comes on solid. only other thing i found is the wiring going to #5 coil had cracked insulation i repaired the wiring but still runs the same has there been any ecm problems related to misfire codes? iam running out of options and am scared to take to dealer!!! please help!!

When you say the insulation was cracked do you mean the actual insulation covering the copper wire or just the flexible conduit the wiring is run in?

the actual insulation covering the copper wire was split the ground wire was the worst but the small purple wire insulation was also split as well the green/white wire insulation was also split the copper wire itself was ok no breaks but did they contact each other?? i know the black wire is ground and i assume the heavier green wire is power but the small purple wire is it some kind of signal wire?? i cant find a wiring diagram anywhere.

Fixed!!! 

Well the problem turned out to be two bad coils! after I reset the engine light the code came back on and it still misfired the code was still p0305 it turned out that #3 had a bad coil as well I unplugged each injector one at a time listening for a change in idle when i pulled #3 nothing changed so replaced # 3 coil and voila the misfire disappeared! The only thing that gets me is that it never set a code for #3 misfire.