Here's the latest - my temperature gauge seems to shoot up almost to red within seconds of starting the car. While driving it fluctuates pretty dramatically, and heats up faster than I believe it possibly could (30 seconds from cold to redline)... with full oil and coolant. It seems that it almost has to be electrical - anyone tried patching a wire in? I presume that increasing temperature yields decreasing resistance to ground (grounded wire = hot gauge)?
Thanks much!
-Alex

I've found that eratic temp readings can be caused by the fuel and gas voltage regulator located on the dash printed circut board. I repaired by tossing it and jumping two of the terminals, though I can't remember which ones for sure. I'm told this was a Volvo service buletin fix. Worked for me.

It does sound like the sensor. Mine did the same thing. I found that my harness had the insulation problem and the bare wire was grounding the sensor I had to replace the sensor later on. It is hard to get at. I had to loosen my intake manifold to be able to get a socket on it.
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Simon 80 240 290k 17 years.