Recently, I picked up a 1989 Volvo 245 with 250k on it. The automatic AW70 transmission seems to work OK . It hit's each gear with a little 'neck snap' when accelerating hard. I changed the trans fluid once with new gaskets and filter and installed IPD's overdrive by-pass plate for the sad looking original Volvo o.d. solenoid. So, that's one trans. fluid change. I drove the car for 40 miles or so then decided to change the kick-down cable since it was stretched and frayed. So, that is another trans. fluid change with filter and gaskets. I feel I adjusted the kick-down cable adequately. Although I never power flushed the AW70 , I still don't get the 4th gear or aka overdrive. What else could it be?

The AW70 is a 4 speed trans with the 4th gear being overdrive. The button on the shifter de-energizes the OD solenoid which blocks the fluid from activating OD(4th). The OD indicator light operates off the OD relay and will work regardless of the solenoid. Putting the IPD bypass plate on should enable the OD(4th) gear to shift in and out by speed and throttle conditions. So the button and the indicator light are no longer connected to the trans and are meaningless.

Maybe something is blocking the flow for the bypass plate.

Something blocking the bypass plate is a possibility as you say. Since I recently bought this 245 and I do not know it's history. My other Volvo 940 and 240 sedan with AW71 & Aw 70 I have changed the auto trans. fluid religiously for well over 20 years and they both have the original o.e. solenoids and zero problems.
With the previous 2 trans. fluid changes for this 245 there wasn't much sediment in the filter(s) since I replaced them twice within 40 miles of each fluid change.
I wonder if I should try that power flush business from the top tube of the radiator that others speak about. I will also check that by-pass plate again for sediment. I was extremely careful with cleaning the solenoid area before removing it though. Any other comments are welcome...

I thought with the bypass plate you lost the ability to manually shift between 3rd & OD. Read about it in the archives here.
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240 drivers / parts cars - JH, Ohio

Correct, you just have OD.
Dan

You have bypassed the ability to switch in and out of OD with the IPD plate, as it is now you are automatically in OD when it shifts to third gear.
Dan

I cut a groove in a failed OD unit last year and thought I was getting 4 gears.
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240 drivers / parts cars - JH, Ohio

No, I don't think so. Although, I do not have a rpm gauge in the car nor does my small Sun machine auto analyzer work anymore so It's hard to watch the rpm.
At 65mph it seems to slow fairly rapidly when you let the car glide... like down shifting into 3rd.
Also I am judging by my other '90 240 sedan and this 245 wagon does not shift at the 45 mph increment to 4th but maybe it's because of what you had mentioned.

AW70 is a three speed transmission with and OD. You took out the OD solenoid to install the IPD plate, that is what "shifted" the trans into OD. If you want OD you need to install a working solenoid.
Dan

This really is not accurate. The solenoid only control if the OD get fluid pressure or not. If you stomp on the gas from a standing stop you still go 1-2-3...wait for it...OD. I know as I did the dremel mod on my 760 turbo which accomplishes the same thing.

Oops never done this mod, I have always maintained the OD as designed.
Dan