Well, it sounds to me like you know what you are in for... Were it me though, I'd either find a good auto 122 and keep it in good order, or go whole hog and swap the whole drivetrain...engine and all. I could see how a later Volvo B23 or something with a locking torque converter automatic would be nice in a 122.... And probably not be a whole lot more work than just doing the transmission.

Best of luck whichever route you choose!

For me... I despise the BW35 setups in the old Volvos. Though I gotta say, it worked OK in my 145 for the time I drove it that way. Drove it for about 2 months abusively then swapped everything between the radiator and the gas tank (engine, transmission conversion to M41, driveshaft, rear end all in one weekend). I do still have most of the linkages and stuff I took out... but thats 140 stuff. Probably wouldn't do you any good anyhow.

-Matt