My first bet is that the clutch is dragging. Any one of several failures can cause a clutch to drag, including a binding clutch cable. My clutch used to drag because my spline shaft came from the factory with no grease on it and it rusted so badly that the clutch facing disk couldn't move freely on the splined shaft.

That being said, my '91 was hard to shift into first for several years, then one day at 175k miles, it wouldn't shift into first or second at all, and I was 100 miles from home.

I drove home in 3rd through 5th gear. I figured I was pulling the tranny so I would be replacing the clutch anyway, so it was cheaper to toast the clutch than to pay a tow bill. When I drained the oil, it was a river of gold glitter.

If your tranny fails like mine did, don't try to fix it. I pulled mine and took it to a tranny shop, who charged me three hours ($180) to tell me it would cost $3500 to fix it. I bought a used one from Sacramento Volvo salvage for $600 with a 90-day warrantee. It now has 50k miles on it with no problems. The car shifts better than it did when new.