FINAL CHAPTER ON SLIPPING TRANSMISSION
See posts from Aug 3.

I picked up the car with rebuilt trans.
It got new 2-3 clutch, torque converter, valve body, Volvo oil, and a used case half.
That was because the output bearing was loose in the case.
Drove it around gently for a couple of days, then a 200 mile road trip on a hot day.
Problem was just as bad as before! Bad 2-3 shift and bad 5-4 shift.

But I thought it felt like misfiring, so got the codes read by an independent shop.
(Volvo charges about $120, but deducts it when they do the repair.)
No check engine light, but a misfire code for #4 cylinder.
Got new plugs from Volvo ($65!) and a used coil from the inde shop.
$105 to install plus an engine oil change.
Success! All problems are gone.

I know the ecu retards the timing during a shift so it will be soft and not noticeable.
Reg gas in the car. So during the 2-3 shift at 1/3 power the timing gets retarded which means the plug has to fire against increased cylinder pressure. Turbo has spun up, adding more pressure. Hot day, and reg gas means the timing is retarded more, making it very hard for the plug to fire. Result is mis-fire.

Mis-fire limits power so shift cannot be completed , but it keeps trying resulting in burned 2-3 clutch. It is possible that the trans did not have to be rebuilt, but the burned clutch and bad bearing made it justified.
The trans shop mentioned in the thread did a good job at a reasonable price.

My advice is check the trans codes by a dealer or a high-end place that can read the stored codes before starting major repairs.

Rich, who learned a lot from this episode.