I have just had the same problem with my 1996 850 R, I bought the electrical portion of the switch over the internet for about $45 and then had my local shop install it for $35. The instructions on Volvospeed are really simple but I did not have the time to start taking things apart nor did I have the long 15 Torx screwdriver. My symptoms were that the daytime running lights would not come on, the Tracs and ABS light would not go off and you could not get it into gear. In addition the ignition switch became really difficult to turn the car off (that is what made me do it). I had lived with the "key wiggle" for about 6 months.
Good luck,
John Scales.
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