I agree with Ken, remove your Overdrive Solenoid (middle row of threee, all the way on the right side) and resolder the contacts on the bottom. This needs to be done about every 150,000 miles or so due to fatigue/fractures in the solder. That should fix your overdrive problem. If it doesn't, I'd check the following other components:
1. Wire from solenoid on the tranny to the car (green), this can be damaged or cut if a tree branch gets thrust up there.
2. Switch on the shifter (very rare that these go bad).
3. Solenoid on the transmission (these will occasionally go bad, but the occurances are rare).

If the shift lever seems loose, replace the bushings in the linkage. Put the car on jackstands and chock any wheels that are still on the ground before playing with the linkage. The bushings are part number 666143 and cost $0.85 from FCP Groton and they'll mail them out to you right away.
http://www.fcpgroton.com/VolvoTranny/volvo740b230tranny.htm

God bless,
Fitz Fitzgerald.