OK, let's go over what we do know. The warning lights go on when the key is in position II, right? Then the car is started, the warning lights continue to stay on, right? That can only mean that the warning light system is getting a ground somewhere other than at the alternator brushes.

When the system works, that voltage arriving at the alternator brushes is reduced from full battery voltage by having the warning lights in series in that circuit. Putting full battery voltage on that spade lug on the alternator may have damaged the voltage regulator and/or the rotor windings. I don't know what the voltage should be.

>>The wiring is in good condition with the exception of the oil sending wire, which still functions correctly...<<

Does the oil sensor wire have crumbling insulation? That wire goes through the under-the-engine harness, along with the thin red wire to the inst. cluster and the fat red wire which carries to charging current and terminates at the starter. If insulation failure is visible on one of these wires, they are all suspects, especially the thin red. Also, there are some metal clips that hold the harness in place, and over 19 years they sometimes chafe through the harness cover and the wires inside.

When you had the by-pass wire in place, what worked and what didn't work? You had both ends of the old one isolated, right?

I am using the Volvo Service Manual 1984 Wiring Diagrams, there may be one for the 1983 model. Part number TP 30678/1, 6000.6.84 Call 1-800-25-Volvo or visit http://www.volvotechinfo.com/index.asp and get one for yourself. I got it when I got my 1983 245GL, in 1991, there may be a newer part number. The diagrams are not repeated in any other shop manual, and the book is well worth the price.

Good Luck,

Bob

:>)