That's a ridiculous price on the transmission replacement! Those 5 speeds are in a number of other makes and models, and in Europe it is commonplace to replace just the valve bodies to rehabilitate them, assuming other components aren't damaged. The re-manufactured valve bodies run about $600 USD.
Try posting on Matthew's Volvo site-- there's a guy named Mike who is in Melbourne (he goes by the screen name precopster), who has expertise with these transmissions and may be able to help or point you in the right direction for local help.
Good luck!
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