Digger,

Get your PNP switch replaced. I live in Minneapolis and it has been very cold lately. When temperatures started to get cold < 30, my 1995 850 had trouble shifting out of first...it progressively got worse as it got colder. With temperatures below 20 I couldn't shift out of 1st or into 4th (if I started in winter mode from D)....it could take 20 minutes of driving to warm up properly where I could shift...never had a problem shifting before. I have my transmission flushed regularly, so I knew it wasn't an issue of transmission fluid. If you haven't had your fluid flushed and it looks brown, then flush it first and see if that works. The pnp switch costs about $130 at the dealer and you can buy it online for about $110.I had new part purchased and replaced for $234.You could replace the part yourself if you have the time...go to volvospeed to see how. The cold weather shifting problem that I describe above is definitely related to the pnp switch. Other symptoms may include:

1) Flashing yellow up arrow (winter mode indicator) in dash, which will put you in limp home mode.
2) If you get the above you might find code 313 (Incorrect signal from gear position sensor) or 322 (Incorrect gear ratio for given road speed). I only got the flashing arrow once; I believe I caused it by holding about 4000 rpm in 1st gear for 15-20 seconds)
3) You might have trouble starting the car, which can be rectified by moving the gear selector back and forth (the gear sensor my not select park accurately, etc.)

In any case since have my pnp switch replaced I have absolutely no problems shifting out of first....and I am testing things here, my car sat outside all day while I was at work and the high temperature today was about 10, tomorrow the high will be about 4. If you have any further questions feel free to email me directly.

-Scott

Hello,

When the PNP switch in my wife's 1995 850 Turbo first started to go, it did just that. It started to stick in first when it was cold. Then it did it more and more often until it was a real pain to even drive the car. It now feels like a totally different car and a pleasure to drive I just had our PNP switch replaced a week ago). Anyway, sounds like a bad switch to me. Good Luck to you, and I hope this helps.

Joe Schaefer

P.S. - Sometimes shifting from Drive into 3rd will cause it to upshift when it is stuck in first gear.

This site describes the symptoms:

http://www.volvospeed.com/Repair/pnpswitch.htm

The orange up arrow light flashing on dash and the transmission locked
into limp home mode (it locks into 3rd gear so you will accelerate
slowly) are the two big signs. Often seen first cold morning. Once car
warms up it can be turned off and restarted and problem is often
cleared. I also found that manually shifting (say D to 3) could
cause the up arrow to flash when ours failed.

I've also read, here, that when cold the car will hold 1st gear shifts
a bit longer to speed up the engine warm up process. But it won't
lock in 1st. Thought I'd mention that in case that is what you are seeing.

How many miles since tranny flush?