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My first thought would be the brushes in the alternator, about a $40 fix with a new brush pack from the local imports parts store. When the alternator stops charging the dash lights act just like they do before you start the car ie. all on.
'86 was also in the latter years for the infamous degrading harness, insulation flakes off the wires causing all kinds of wierdness like you describe. If you look at the wires down by the oil filter (passenger's side front of engine) and see bare spots on the small red wire that feeds the alternator the harness has not been changed. There are 3 options for fixing the harness, dealer replacement ($$$$$) a used replacement harness (I have changed 3 in my bricks) or doing a wire by wire fix with solder and shrink tubing.
I hope it is the brush pack, but replacing the harness is fairly easy and not too much money, see my web page for pics of 2 of the jobs I did on my cars, yours would be the same as the '84.
Dave Shannon
Spring Valley, California (San Diego area)
'84-245 200K+
'84-245T 190K+ being dropped off this morning (YAY)
'85-244Ti 200K+
'86-740 230K+
'88-240 180K+
www.volvo2.homestead.com (Opens new window)
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