Now that I have had a few days to play around with the XC70, I have made a few more observations.

1) The code reader at O'reilly's was only able to indicate that there was a problem with the transmission and that the codes would need to be read by a shop's scanner.
2) The transmission was over-filled with fluid. The fluid is reddish brown.
3) When the car is first started, the transmission shifts smoothly through all of the gears as it should. The instrument panel indicates whether the transmission is in P, R, N, or D. This happens whether the car is warmed up or cold. A few minutes after the car is driven, the panel indicator is replaced with a dash, and the transmission stays in what I believe to be 3rd gear.
4) When the transmission has entered this limp-home mode, I can engage gears 1-3 by using the manual shift feature, however, the transitions are very harsh.
5) The limp-home mode can be reset by stopping and restarting the car. After doing this the transmission will shift as it should for a short time... a minute or two... before returning to limp-home.

This weekend I intend to flush the transmission with 3309 and refill it to the correct level.

Any ideas?
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1966 122s, 1968 142s, 1969 144s, 1979 245dl, 1989 244gl