Dear GACyclops.
May this find You well. The shift lever has, indeed, separated from the transmission linkage. The lever linkage to the transmission has a pin, secured by an e-clip. The e-clip likely corroded or broke, and the pin fell out. As a result, when you move the shift lever, nothing happens inside the transmission.
As Gus123 suggests, jack-up the car (be sure to support it on jackstands), and inspect the linkage, which is on the driver's side of the transmission.
The pin is Volvo Part #381705; the e-clip is #951669. There is also a rubber grommet, which may have rotted-out. It is part #381704.
If these parts are present and in good order, then look for missing nuts, that secure the other ends of the linkage. If those are present, and in good order, then the problem is internal to the transmission.
That is unlikely: the Aisin-Warner transmissions have been very durable. Failures are caused mostly by coolant getting into the transmission fluid, when there's a failure of the in-radiator trans fluid cooler. Water in the coolant then can damage the clutch pack facings. This is not likely to have happened in your case: the problem surely is linkage-related.
Hope this helps.
Yours faithfully,
Spook
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