ok, after driving today, I am really convinced the hesitation is engine related not transmission; however, it is not throwing new codes since I cleared them several days ago.
Symptoms:
Starts and runs great when cold.
once it begins warming up you can feel just a wee bit of hesitation upon takeoff like from a stop light
once completely warm, lots of hesitation [almost as if it wants to cut off] when accelerator is applied from a dead stop (like at a stoplight that just turned greed). It then kind of catches and runs like a champ through the gears and upon cruising.

I would just replace the plugs, cap, rotor, and coil but don't want to just throw money at it without proper diagnosis first especially since oem ignition stuff for Volvo is not cheap.

I can visually inspect the cap, rotor and plugs. anyone have specs to test the single coil?

Thanks