Thanks to all who helped with my 'no overdrive when hot' problem. My recent fluid flush seems to not have done anything; still dropping OD when trans gets warm. Went under the car and the wiring looks ok visually, but I'm suspicious since everything is covered in dirt and oil from a past leak. After jiggling the wiring around a little bit, I still have the problem but it seems to be slightly less consistent. So I'm thinking it's a wiring problem - resistance increases to a point with heat that causes the current to not make it anymore.

I'd like to remove the solenoid and do the permanent fix in the faq, but have run into a problem. I can just access the two bolts, but despite there being a lot of oil under the car, they have rusted to a point where a 12mm wrench will slip, and I can't force an 11mm on there due to lack of clearance. Has anyone had any luck with a different technique? I'm wondering if there's a tool out there to address this problem I don't know about.....

When the FAQs are not enought, here is one persons technique.
First, if the bolt is rusted, the lockwasher is only rusted to the solenoid flange and the bolt head, not in the threads as the case is aluminum so PB Blaster or Kroil will help but not solve (no pun intended). If you use penetrants, use starting fluid or brake cleaner to clean off around the solenoid base before you start as both dirt and penetrants are not good for the inside of the transmission.
Second, free the solenoid wire cable and the brackets before trying to loosen the bolts. This lets you get better access if you flop that out of the way. If needed you can take the nut off the shift shaft input and move it away, however, you need to hold the lever so you do not stress against the transmission valve assembly inside. The lever goes on with a rectangular notch.
Third, attack the bolts which set very close to the solenoid body and come out by hand after a turn or two. IMHE the original bolts seem way overtight due to being threadlocked so what works is a quarter inch 6 pt socket with extensions to get down on top of the bolts or a thin box end wrench and lots of force. The posture is pulling the car and the wrench or ratchet together so you can put enough force on it. In a dozen or so times, the bolts mostly "crack" loose. When you get it out, check to make sure the old o-rings are not stuck on the transmission flat.
Finally, take heart, installation is a breeze compared to taking it out.

Wow, vigilante - thanks for the detailed response! This might be a useful addition to the FAQ. As luck would have it, I just happened upon an almost-pristine 940 turbo sedan, original owner, all maintenance records, just shy of 70k miles. So I think I'm going to donate the car with the bad trans and try to start over as fresh as I can. I'm sure this new brick will have similar trans issues in its future, so your input is still greatly appreciated!

You're welcome, a 944 @ 70K is a real cherry (almost new)Volvo to find. Keep a copy because sooner or later, the solenoid either opens or shorts internally and the task will be at hand. BTW, a couple of my solenoids had the white wire break from vibration right before the soldered tab under the rubber potting, a bit of solder and RTV for potting and the solenoids were RTS (returned to service)costing only the two new o-rings.

Thanks for the additional tips, I'll definitely file all this away for when the 'new' car needs it. I feel a little guilty upgrading like this, since I've put a lot of time into the older 940 - but this new one was hard to pass up. (although it needs a muffler, turbo won't go into boost, and it has a dead temp gauge - so I'll still have plenty to keep me busy...)

Yep, I agree...
Steve
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See the 700/900 "FAQ" at the menu bar top screen left side.