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You might also want to check the PS fluid as the steering rack is on the left side, just below the firewall.
I would not get a 'new' torque converter. It would cost less to get a 1998 tranny from a reputable salvage yard and have that installed. The 1998 is better than the 1997. Volvo ATF is not needed, if any upgrade is used, get Mobile 1 synthetic ATF, otherwise stick to DEX.
If you still have a check engine light, go to a parts store and have them read it and tell you the generic code. Try erasing the codes if you can.
You do need to get on the road and watch the tach as the car goes through the gears. It should go into 4th without complaining, but might not lock up the torque converter until 50-55mph. Then pull over and check for leaks.
The torque converter is like a clutch for the automatic, it allows the tranny to shift without letting up on the gas. The 'lock up' for the torque converter fixes the tranny so that there is no slippage. The newer trannies have lock up in 3,4, and 5th to improve fuel mileage.
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My name is Klaus and I am a V♂lv♂holic
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