"The M45/46/47 uses ATF".
Be careful about what you call ATF here. I went to the Volvo dealer and asked that they order me the exact replacement for the M47 fluid and they read to me from a factory publication the exact lubricant rating and fluid type. (I have it written somewhere), but the jist of it is that it is fullly synthetic, manual transmision fluid in a 5w-90 rating, with temperature range and viscosity rating that is different from ATF, although the ATF has similar characteristics, it doesn't have the detergents that ATF has. The Volvo stuff was $29 qt, and nobody ever ordered it before.
After going to Redline, Amsoil, Penzoil and others websites, I found that the only fully synthetic transmision fluid on the market that meets Volvo's spec is the Redline MTL (Manual Transmission Lubricant), and for $8.75, well worth it.
I don't think the problems here can be attributed to old/dirty fluid. After 250k miles of orig Volvo fluid, I fould it as clean as new Redline, and free from debris or sludge in the bottom of the tranny, so I do believe it shouldn't be messed with, although I did change it, which gave me the satisfaction of knowing it was good.

There are two $2.00 hinge pins in the coupling in the linkage at the rear of the tranny that go bad, along with a rubber o-ring. Easy to replace. The nylon ball socket also can wear at the base of the shifter, but usually when it does, it's due to lack of lubrication, dirt falling from on top, and the nylon chews up the steel ball. Get the replacement parts and mate them to the old ball to see if the spherical shape is distorted, scored etc. You may need a new shifter. Also the two bushings at the pivot wear, along with the o-ring, so definetly get these. If you can get the old bronze type instead of the nylon they are better. Also order a new set screw sing they often are pretty rusty. If you need to replace the shifter, order the two rubber bushings if needed and roll pin that go into the top of the shifter, as you'll need to remove the pin to take the lower part of the shifter out. The upper rubber bushing often goes and causes vibration/rattle side-to-side when the car is atcruise or idle.
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'89 245 sportwagon, destroyed by hit & run driver, RIP. '04 V70 2.5 T Sportwagon, 12k mi and '91 245 5-speed, 209k mi, replaced the '89