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Hello Stony,
I had this problem for years. We used to carry two sets of keys, monkey around with the steering, sometime it worked, sometime not. And then I found this on one of the other Volvo forums:
The antenna ring sounds like your problem but there are things you should do first. The connections on antenna ring and on the immobilizer control unit that is next to steering column need to be cleaned and have the female terminals closed down a bit. Use a very sharp pick and push in the sides of the socket terminal. Use dielectric grease on pins too.
A very common scenario before more was known is to replace antenna ring and then the problem goes away but it can be temporary. The old part being unplugged and new part plugged in does a weak job of cleaning connector and it can be a few months fix. That car uses the Immo control unit with less than stellar connections too and those need attention since quick comebacks after antenna ring repair usually were fixed with attention to Immo terminals.
The signals through these connections is a very few miiliamps so any corrosion or looseness will stop signals.
The antenna ring is around the ignition lock cylinder. Remove the steering column top and bottom covers to get access. Immo control unit access is by remove the underdash panel on driver's side.
I cleaned up the antenna ring connection per above, and never had the problem again.
Marty Wolfson
Proud member of the 300K club
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