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You might have hit it there, with the kickdown cable adjustment thought.
Our 94 would have the 4th (no 5th) gear to go into lockup at about 45-47MPH under light throttle, with a 200-300RPM drop. It then needed to slow down quite a bit or be given a lot of throttle to unlock...almost enough throttle to simultaneously kick down into 3rd. If yours is unlocking at very slight throttle increases, I would say that's not the way it should go. The lockup function (engagement of the torque converter clutch) is governed only by internal hydraulic action in the trans - no electrical stuff going on.
You probably have an AW71L, and confirmation will be on the trans ID tag on the left side of the trans. It will show "03-71L". Ours had a harsh 1-2 upshift under light/medium throttle, and that seems to be characteristic of these at higher mileages. More info in the FAQ's.
Our 94 (sedan) would get ~30MPG (US) on the highway at a steady 65MPH. Along with the minor tuneup stuff you've done, get a fresh cam cover gasket and check valve clearances. Usually very stable, but will tighten up given enough operating hours. Alternatively, too-wide clearances can cause enough vibration to trigger ignition timing retard via the knock sensor. Volvo reduced the allowable valve clearance upper limit when the KS was introduced with the LH-II system in 1983, and emphasized this in the service manuals.
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Bob: Son's XC70, daughter's 940, my 81 and 83 240's, 89 745 (V8) and S90. Also '77 MGB and some old motorcycles
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