The correct procedure isn't quite what you described: "...Flushing my tranny as recommended in the FAQ. Drained 2.5 quarts of fluid from pan, replaced plug, refilled same amount. Connected hose to nipple at top of radiator and turned car on. All was going well when I was in Park--nasty fluid was coming out of radiator, a quart or two at a time. Replaced as this was happening...."

I've never drained the sump from the drain plug. In fact, a TSB from Volvo states that it isn't necessary.

As the initial step, you (as you described in a later step) disconnect the upper radiator line from the radiator tank, and attach a hose to drain fluid into a container. Run the engine at idle to remove ONLY 2 qts (1/2 gallon), stop the engine, refill like amount through the dipstick, and repeat (remove another 2 qts, etc.). Remember that you only drain 2 qts at a time, in order to keep the fluid in all the passages -- that may be your problem. Also remember the dilution factor (you're remixing new fluid with old), so you need to exchange a lot of fluid to really get it flushed.

Re your problem, I'm thinking that you really haven't refilled the proper amount. Could you have miscalculated, or mistallied, your refill amount. Did you actually check the ATF level on the dipstick?