Update:
The specialist transmission workshop has not been able to find any electrical faults that would cause the vehicle to behave in the way I have previously described.

They have concluded that the clutch components within the auto transmission unit are damaged and have become locked together. This is the reason that I can no longer select reverse gear. Apparently when this happens some of the clutch components can break off and the loose pieces then cause further damage inside the transmission and also clog up the internal filter, when this happens there is a loss of fluid pressure within the transmission and then loss of all drive. Stopping the vehicle for a short time allows enough of the debris to fall from the filter and the vehicle will then drive forward until the filter clogs up again. I did experience this when on the 2-mile journey to the repair shop.

It seems that the only remedy / repair is to either replace the transmission with a reconditioned unit or to remove and repair the existing transmission, either way the bill will be in the region of £1,600 ($3,000 US) (not sure of the exchange rate)

I was told that if the transmission fluid had been changed at regular service intervals, say every 30,000 miles, then this terminal and expensive failure might have been avoided.
It is not 100 % guaranteed that the fluid being changed would have prevented this failure, but when you compare the cost of a £70 fluid change every 30,000 miles to a £1,600 replacement transmission at 90,500 miles, as in my case, then possible prevention has to be better than an expensive cure.

There are probably hundreds of 850’s out there that are still running like new with the original fluid and half a million miles on the clock, but it seems likely that they are running on borrowed time.

I am annoyed with Volvo and their inappropriate guidelines regarding transmission fluid change intervals, if they stand by their guidelines (ie, “Renewal of the automatic fluid is not a service requirement”) then they should take responsibility for the transmissions that suffer such failures where fluid is or has been a factor.

There is little I can do other than to post this message and make other Volvo 850 owners aware of the potential expensive repairs that await them if fluid changes are not carried out. I hope that you will not suffer the same fate as I have.

On the other hand I have also seen posts from owners that are having transmission problems after a flush, so you can't win.

I welcome your comments on any of the above.