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Hmmm...personally I see nothing wrong with selecting first gear as you roll to a stop with a modern full synchromesh transmission. Should not be cause of problems, despite what was implied in a previous post. Of course once stopped you shouldn't sit there with the clutch depressed (but that's a TO Bearing issue, not trans).
Sounds to me more like the clutch is not fully disengaging, not a transmission problem. Is the 850 clutch hydraulic? Were it an Audi, which I know better than Volvos, I would say bleed the clutch, and if that didn't fix consider changing clutch hydraulics--both slave and MC at the same time. Pretty common on older model Audis at ~100-150k miles old to loose clutch hydraulics (fortunately, a pretty cheap and easy fix).
It is possible that the 1-2 synchros are worn, but that is not the only possibility. As an alternative to an "additive" I would suggest changing the transmission oil with a good quality synthetic (Mobil 1, Redline, Amsoil, etc.) and see how it feels after that. Many a balky transmission has returned to a butter-like feeling with a nice fresh dose of synthetic gear oil. Not too expensive to do and worth a shot.
If it winds up being a bad gearbox, I would suggest parts recyclers. Aren't Volvo transmissions supposed to be strong? (Unlike a certain other Swedish auto maker...)
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