There are a number of things inside the transmission and from the shift cover that can come apart or break and get caught in the gears.
If it were back when we used to do some drag racing, I'd blame it on a 1st to 2nd gear slam shift. In fact at 1 point, we had half a dozen clusters sitting on shelf, most of which were missing most of if not all of the 2nd gear teeth. And 1 day, my brother's former business partners mother came over to the shop and saw all of the broken clusters and asked us to clean a pair, paint them silver and she used them as gear head candle sticks for her house.
I suggest you do a thorough tear down on your transmission as you may need enough parts to warrant sourcing a whole different transmission. FYI, we almost always have the parts in stock to do a normal rebuild on all 3 basic styles of M40/M41 like new synchros, mainshaft and cluster bearings, cluster shafts, thrust washers, shift dogs springs and gasket sets. We also have some whole transmissions, some of which might be rebuildable.
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Eric Hi Performance Automotive Service (formerly OVO or Old Volvos Only) Torrance, CA 90502 hiperformanceautoservice.com or oldvolvosonly.com
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