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Mystery Transmission Problem 200 1989

I have a 1989 Volvo 240DL Wagon/automatic transmission. Last week I started the car, pulled out onto the road, and the transmission would not shift out of first gear (perhaps it made it to 2nd, would not go over 15 mph). After a few minutes, the car functioned normally. It was several days before the problem repeated, and then only at start-up.
My mechanic cannot explain the problem, but says a $1500.00 rebuild is required to fix it. He suggested letting the car warm up for a few mintues as an alternate solution.
Does anyone know the possible cause of this problem. I don’t want to overhaul the entire transmission without a better diagnosis if its not necessary.

Thanks,


James






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