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I had the same problem, although I didn't run the tranny DRY! My fluid disappeared from a leak on the output shaft where the seal is supposed to keep the fluid IN.
I did a complete fluid flush. When that changed nothing, I dropped the pan (after I drained it) to replace the fluid filter. I let it drain for a while. nothing was coming out. dropped the pan, and got the residual out of the pan.
Nothing was dripping. I undid the filter and broke it loose from the gasket. Now I am covered in fluid that was being "held" in the cavity above the filter. My guess is that mine REALLY needed changing.
I also noticed that one of the two fluid lines that run near the bottom of the pan had seperated away from the valve body, so I gave it a sharp shot with my palm to reseat it.
Got it all back together and it shifted much better. It was acting up once in a while though... I thought my tranny pump was going, as it sounded like a dry power steering pump.
I decided to throw in a quart of "snake oil" (you know... it fixes every kind of problem from a leak to bad shifts to making your seals new again). I don't believe in these products, but I have to say, after running this product in the tranny for about 700-900 miles, it occoured to me that the tranny haden't acted up in a while.
I am now another 800 miles beyond that point. knock on wood... all is well.
I would imagine if it was run dry and got hot, there would be lots of clutch debris floating around in there, possibly clogging the filter. It sure can't hurt to change it and see if that can get you more miles before you throw $ into a rebuild or swap. Unless of corse, you need RELIABLE transportation. You would be better off buying a new volvo then.
good luck!
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