Digger,

Get your PNP switch replaced. I live in Minneapolis and it has been very cold lately. When temperatures started to get cold < 30, my 1995 850 had trouble shifting out of first...it progressively got worse as it got colder. With temperatures below 20 I couldn't shift out of 1st or into 4th (if I started in winter mode from D)....it could take 20 minutes of driving to warm up properly where I could shift...never had a problem shifting before. I have my transmission flushed regularly, so I knew it wasn't an issue of transmission fluid. If you haven't had your fluid flushed and it looks brown, then flush it first and see if that works. The pnp switch costs about $130 at the dealer and you can buy it online for about $110.I had new part purchased and replaced for $234.You could replace the part yourself if you have the time...go to volvospeed to see how. The cold weather shifting problem that I describe above is definitely related to the pnp switch. Other symptoms may include:

1) Flashing yellow up arrow (winter mode indicator) in dash, which will put you in limp home mode.
2) If you get the above you might find code 313 (Incorrect signal from gear position sensor) or 322 (Incorrect gear ratio for given road speed). I only got the flashing arrow once; I believe I caused it by holding about 4000 rpm in 1st gear for 15-20 seconds)
3) You might have trouble starting the car, which can be rectified by moving the gear selector back and forth (the gear sensor my not select park accurately, etc.)

In any case since have my pnp switch replaced I have absolutely no problems shifting out of first....and I am testing things here, my car sat outside all day while I was at work and the high temperature today was about 10, tomorrow the high will be about 4. If you have any further questions feel free to email me directly.

-Scott