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Sounds like the speedo cable is frayed. Both my 1989 and 1990 had this issue. It frays by the top of the differential.
I replaced the pigtails,3523813,on the harness, but apparently you can replace the whole harness, 3523912 :
https://www.brickboard.com/FAQ/700-900/ElectricalInstruments.htm#Speedometer_Failures
I believe the added a bracket,3530587, to support it on later models you can get.
http://volvopartslisle.com/part/OEM-Volvo-Part-3523912/Wiring-Harness
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Paul NW Indiana '89 744 Turbo 180K/ '90 745 turbo 145K
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