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There is a switch on top of the transmission that fails quite
often. The PNP switch. Switch is about $70 to $90 plus about
2 hours labor. More then one transmission has probably been
replaced because of a bad PNP switch.
See this site for the details:
http://volvospeed.com/Repair/pnpswitch.htm
By the way, the car is probably locked in 3rd gear. The
transmission does that when a failure is detected. Its
called limp-home mode. Should be accelerating very slowly
when this happens. Sometimes you can turn off the engine
(once the car warms up) and restart to clear this and the
flashing up arrow light. Eventually it will fail completly,
though.
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