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Is your car an early year 240? Say, Pre 1986 or so? Does the engine feel hot and uncomfortably heated? If the engine itself is okay and you dont think the car is warm, the coolant level is normal, and the thermostat is good...I would seriously check the converter on the back of the insturment panel. If you take the insturment cluster out and look directly behind the fuel / heat gauge you will notice a silver / copper box about 1" X 1/2" or so. These do go bad and need to be replaced. Its a simple un-plug and plug-in process. You could even get a replacement from the junkyard for cheap to see if it is the problem.
This has happened to a couple of my Volvo's in the past. I was getting really hot readings but everything was normal. With a laser thermometer, my car was within perfect temp. Once I replaced the converter on the instrument cluster everything was normal...even the gas gauges read more acurate. I am not saying this is your problem but it has happened many times in the past to me and others and it could be a start for you.
Best of Luck
Ryan Rice
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VOLVO LOVER WITH AN 80 AND AN 82
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