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Steve,
This is an old favourite for Volvos of this vintage(Kelley, jda2000 and myself amongst the many) have all had this problem. Cleaning is at best a temporary repair in my experience and you will end up replacing the TCM sooner or later. My advice if you plan to keep the car is to replace the TCM sooner as it can be quite nasty when it fails (Both Kelley and I can vouch for this)...
I am not aware of any software upgrades for this year that will fix this issue. Its a predominently hardware problem caused by poor design of a component.
Good luck!
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