Volvos made from late 1984 onward are fitted with a pressure-sensing switch connected to a solenoid valve on the injection pump that affects injection timing. Above about 3300' the switch trips and cuts power to the solenoid, putting it into high-altitude mode. The difference is audible. Maybe adding such a solenoid would be a good option for your truck? Or, since you probably rarely if ever descend below 5000' you could also simply adjust base static timing so that it is tuned for high altitude at all times.
The behavior you're describing is normal for a D24T/IC to some extent especially at high altitude, but the range of adjustment between having no power and having too much smoke should not be as narrow and sensitive as it sounds like it is on your rig. One thing to keep in mind is that it's necessary to run further advanced initial injection timing if turning up the fuel beyond a certain point. Playing with the fuel limiter screw (aka "smoke screw") adjusts injected quantity, but it does not affect start-of-injection timing. The injectors are not able to vary the *rate* at which they inject fuel, they can't give a bigger slug or a smaller slug depending on what the pump is sending them -- the only way they can inject greater quantities of fuel is just by being open for a longer duration of time. That means that if you turn the fuel up beyond a given point and haven't adjusted the pump timing accordingly, the injector essentially can "run out of time" to get all the fuel into the cylinder while conditions are suitable for burning it. In other words, you can be injecting a quantity of fuel that stoichiometrically speaking is appropriate for the amount of air entering the engine, but if you're not starting your injection events early enough, then by the time the injection event is finished it's spraying fuel into a cylinder that is already nearing (or even at) the end of the power stroke and that fuel is just leaving the engine as excess smoke rather than adding to the engine's output. This situation can also lead to extremely high EGT's so you need to be careful. By starting the injection event sooner -- within reason of course, it must not start *too* soon... -- you give the injection system an extra few degrees of crank rotation within which to accomplish the full fuel delivery, and you'll be able to turn the fuel up beyond the point where it smoked before and have that extra fuel now be used to make additional power instead.
Given the amount of load and driving conditions you're talking about subjecting this engine to, getting a pyrometer installed as a first step so you can monitor EGT's while you're working on tuning it would be a good way to make sure you don't accidentally damage the thing. Next, you'll want to know where your static timing is set. Do you have the measurement tools for checking pump timing? Getting that sorted is the critical first step. Engine compression and valve lift/timing also can have a significant effect on airflow and smoke, so if you are not 100% certain that the cam timing is correct and the valve clearances are in spec, if you want it to really run right you should plan to get baselines on all those things before you spend too much time tinkering with the fueling settings on the pump.
I would suspect that a fairly aggressive timing setting of at least .95mm would be suitable in your situation, maybe even higher if you do a large proportion of your driving at altitudes even higher than 5280. If you check the pump timing and find you're down in the low .90's or .8x range somewhere, adjusting to .95-1.00 would probably help driveability significantly and allow you to burn more fuel and make more power without excessive smoke. That plus making sure the other engine parameters are in spec should give you a broader band of adjustment between making it too smoky or being a complete dog...