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HI Dave: I did have the same problem with my 88 740 non-turbo . after checking things out I found I had a bad tempiture sendind unit. Mine is located under the intake manifold a little more than half way back from the front of the engine. It's a little hard to remove, but what I did was used a pair of wire cutters and cut all the plastic and the 2 round pin cintacts off. Then I used either a socket or small pair of vice grips and turned it out. You can only turn it a little bit at a time so you don't hit or bump into the knock sensor. Once I got it to move just a little I could unscrew it buy hand, the threads had anti-seeze compound paste on them . I put anti-seeze on the new temp. sensor-sender before I installed it as well. BEFORE you do this job disconnect your negitive ground cable from your battery ! When you are finished with the job re-connect the ground cable and start the engine , let it idle for about 5 mins. so the computor can readjust the idle and emissions settings. My engine ran fine after that , no ups , downs, tach all over the place and the temp gauge when back to reading normal instead of bounceing and dropping off at any given time. Good luck and I hope this has helped you and not confused you. Dan Metz. Please let me know how you make out and if I can help you again I will be glad to.
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Dan's 88 Volvo 740 GLE WAGON non-turbo
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