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I had the same problem with my neutral safety switch (also known as a PNP switch for some obscure reason). During a discussion with an independent mechanic who services only Volvos, he said that it was a common problem and that his shop of eight mechanics averaged about three switch replacements per week in the Orlando area. As I recall, the part was available only through the dealer who wanted about $150 for just the part. If your mechanic can do the whole job for that price (part and labor), better jump on it.
I took a chance at the local salvage yard and bought a used one for $60. Installation was a bear of a job, but I completed it. The procedure calls for unbolting the exhaust pipe, but I was able to remove it without disconnecting the pipe. The Shadow even posted some info concurring with this procedure. I did have to disconnect the transmission cooler lines from the trans housing to provide clearance to slide the switch off the shift rod sticking out of the trans. The unit is located on the passenger side of the trans, with a wiring pigtail that goes up over the trans and plugs into a connector on the driver's side. The pigtail was tied in several spots, and I had to cut the ties by feeling for them and hoping for the best. There's provisions for adjusting the positioning, but I didn't have to mess with it as my car ran OK after installation.
Good luck.
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