Driving from S.C. to Maryland I noticed that the Economy,Sport and W button indicators beside the automatic gear shift lever were flashing as well as a flashing arrow under the tach on the instrument cluster. I had the trans in the S position (sport mode) the indicator lights beside the S and the W were alternatly flashing. This would stop after about 5 minutes. Did not notice any change in shift pattern or feel. The flashing indicators and flashing arrow would both come on and go off at the same time. This happened at 5 different times on the roughly 500 mile trip. I have been driving around town here in
Maryland for three days with no more flashing indicator lights. My fear is the trip back to S.C. should I worry any thoughts are welcome.
Thanks
WA

Most likely it is what the others are saying, PNP switch.
I would get the codes read to be sure, how does the fluid look, nice and red? Does it have a harsh smell? When was the last time it was flushed? Is the level okay? It is possible the unit overheated, that would throw a code too. It could be other things, so is the importance of getting the codes read.

DanR 94 964 282,000 miles (48,000 on the new engine)
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DanR

Somewhere along the line of these cars, they must have figured out a way to make the PNP work, or I'm just damn lucky. I replaced two of these puppies on my 92 (another symptom is no back-up lights.) and none on my 97 V90 @ 115K, excudng the possibility that one was replaced before I bought it at 82K.

I'm in Baltimore, and have a good independent in my neighborhood that might have time to change it out assuming you can get one here. He's done one of mine in the 92. It can cause a no-run situation.
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John Shatzer, '97 V90 @ 115K

the flashing lights are indicating you have a fault code in the trans control unit. If it hasnt locked you in 3rd gear, you probably wont have trouble getting home and taking it to your mechanic. Most common problem is the pnp or gear position sensor switch. If the fault is major the module will lock the trans in 3rd gear and will be kind of spooky accelerating from a stop light.

Sounds like the PNP switch for sure, try this, turn the ignition on and don't start the car,take the gear selector and move it from park to low about 20 times. This will hopefully clean the debree off the contacts on the switch and you should be fine for a while. Probally going to need a new switch though.
Hope that helps Poolman

I had a problem with transmission locking up in third gear with the overdrive light on the dash flashing on and off. I drove(limped) for several miles before remembering a suggestion about stopping, and with the engine off, moving the shifter quite fast all the way from Park to 2 gear over twenty times. When I started the car and drove, it ran fine as if nothing had happened. A year later and still good as new! 1994 Volvo 850 nonturbo with 117K miles.