Welcome to the Club,
I know just how you feel. Just when you are about to shift into 4th gear you let your foot off of the gas pedal and WHAM! The whole car shakes as if you hit a pothole. Another symptom I noticed is a rough shift between 3rd and 4th gear when the transmission is HOT (been running awhile). And the last problem is a shutter. You are driving at 55 mph; you put your foot on the gas pedal and the car shutters.
There are 3 problems here and they should not be confused. Problem #1 is the transmission fluid. Volvo has stated to me (I had a "Long" talk with two factor reps and an actual Engineer from Sweden) and in a service bulletin (http://www.nhtsa.dot.gov/, look under problem & Issues) that the transmission fluid can be burned (i.e. worn out, no longer has the quality of a hydraulic fluid). When this occurs your toque converter lock up no longer works as designed. This is best notice when you are driving between speeds of 50mph and 80mph(in my case 55mph is the best speed to notice the problem). You will notice a shutter every time you put your foot on the gas. It is like running over a row of small rocks. This problem can be fixed easily by flushing the transmission fluid. Volvo told me that there is no long-term damage done to the Transmission if any damage was done at all.
The Second problem is of a poor design and can not be fixed. This problem is as I described above. Just when you are about to shift into 4th gear you let your foot off of the gas pedal and WHAM! Your assessment of the problem is correct.
"It seems the accumulator cannot react quick enough if the throttle is released just before a shift is to occur, and the whole drive train shudders and bangs with the harsh shift".
This is a design problem and can not be fixed unless you get a whole new transmission. Preferably not of the same design that is currently in your car (i.e. a replacement transmission will not fix this problem).
And the third problem is a rough shift between 3rd and 4th gear when the transmission is Hot (you have to be driving awhile to notice this problem). Volvo (i.e. the Volvo Engineer and the 2 Factory Reps) believe that the torque converter does not unlock at the correct time when shifting between 3rd and 4th gear thus causing the "Cluck" (it unlocks a little to late). This is a toque converter lock up issue and can be related to problem #1. This is why your Dealer is into transmission fluid flushing.
The dealer, Volvo factory Reps and the Volvo Engineer took my car apart trying to figure out the problems 2 and 3. They check all electrical systems, we flush the transmission 4 different times and went as far as to install a new valve body (this unit controls the shifting). The final results were no change. The dealer technician and myself went and drove several XC of different years and found that all 1998, 1999 and some 2000 had problem 2 & 3. Some 2000 XC don't have this problem due to a 5-speed transmission (A different design).
Therefore, the conclusion I have come to is Live with it. One other note I would like to mention. I nailed Volvo to the floor by asking: "If these problems (all 3) do not cause any long term damage and will not lead to a $3,000 (yep you got it!) Transmission replacement for the next 100k miles then I would like Volvo to extended just the transmission warranty beyond 4/50,000". The answer I got was to sell me the extended warranty package at 1/2 price. I walked away from the offer. I felt their response was insulting. My wife and I decided to kee the car until the Factory (4/50,000) Warranty was up and buy a new car. My feelings are that the drive train can not last long being slammed around. Something somewhere is going to give out and I will be stuck with the bill! I had high hopes when I bought my Volvo thinking I had bought a car of high quality. What I got was a poor combination of drive train technology (Volvo engineering of a Japanese Transmission, Volvo transfer case, Germany drive shaft (Silicon gel pack) and a Volvo diferential)and a lot of worry as to if/when it will all fall apart. I do not like driving around thinking something is going to die/break at any moment.
Oh I almost forgot about the upper engine mount breaking. Mine broke too! I do not buy Volvo's explanation. They told me the same as they told you. Your explanation seems to fit.
Good Luck and Best Wishes, Steven---
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