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In the early cars there are two different speedometers. r0960 is for the wagon. r0980 is for the seedan. Someone correct me if I have those numbers wrong. But there were two speedometer units. However, that is not your problem.
There is a gear in the M45 gearbox or in the OD unit of the M46 that drives the speedometer cable. The number of teeth on this gear varies depending on the rear axle ratio.
18 teeth for the 3.54:1, 19 teeth for the 3.73:1 and 20 teeth for the 3.91:1 (also the 4.56:1 but that is found in the wagon and that's where the other speedometer comes into play). In the M46 I think only 19 and 20 tooth gears were used.
Your car probably has the 3.91:1 rear axle so I'm thinking the M46 transplant is from a newer car with a different axle ratio and, hence, a different gear in the OD.
Unfortunately the gear aparatus is not identical between the M45 and M46 so you can't use the one from your original gearbox.
See Volvo publication TP 30056/2 (one of the "Greenbooks"), page 7, item 29, for a vague depiction of the location of this item. It is found where the speedometer cable connects to the OD unit.
That publication can be downloaded from K-jet.org.
Finding a replacement gear may be a challenge as I doubt if it is available as a new part. I can't find the part number right offhand but I'm sure some here will have it. You'll probably need to get one from salvage.
If your shop is stumped by this they don't know the Volvo 240 very well. But the part is easy to change out.
If the original speedometer is now erratic they probably did not get the cable properly seated and fastened at the speedometer.
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'80 DL 2 door, '89 DL Wagon
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