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What you are describing is normal for the O/D light.
Dave,
Starting in 1970, the 1800E and then later on the 1800ES got a throw switch instead of a momentary switch and the relay is eliminated.
However, regardless of the style of switch/relay being used, the way the the O/D light is originally wired, the light will be on if the switch/relay is engaged in the O/D position even if the transmission is NOT in 4th gear.
But if still stock and it sounds like your 1800 is still wired in a stock fashion, the O/D lockout switch on the transmission only allows power to the O/D solenoid when the transmission is in 4th gear.
I have one customer that moved the wire for the O/D light to the pole on the lockout switch that gets power when the transmission is in 4th gear and the O/D is engaged.
So for his car the O/D light is on only when the overdrive is engaged.
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Eric Hi Performance Automotive Service (formerly OVO or Old Volvos Only) Torrance, CA 90502
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