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Transmission Speed Sensor? V70-XC70 2001

I just bought a 2001 XC70. The seller said that the transmission slipped when starting from a stop. Initially, I agreed. However, after doing some searches here, I now believe the transmission is in limp-home mode, and that it is in third gear. The transmission does not shift at all, and the engine is turning just under 3000 rpm at 60 mph. The information text window on the right of the instrument cluster indicates 32 mph (or maybe 36 mph) as the average speed when driving on the highway at 60 mph. The speedometer works fine. The text box will indicate slower average speeds, but never higher than 32 or 36.
I am new to FWD Volvos, but have been doing some reading online, and believe the problem could be the transmission speed sensor. Does this seem reasonable? If so, is this the sensor that is at the front of the transmission?
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1966 122s, 1968 142s, 1969 144s, 1979 245dl, 1989 244gl






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