I have had nothing but trouble with most of the easily available thermostats from large chain auto parts stores.
I only sell and use thermostats that I have to buy from wholesale auto parts suppliers that specialize in European cars. They sell the same brands that Volvo uses.
I keep in stock a 158° thermostat made by Calorstat made in France and a 165° thermostat made by Wahler in Germany.
Considering it was fine before you worked on it and that you had to partially disassemble the transmission to reseal it, I am going to have to assume you may have accidentally dislodged a shift dog and/or spring or some other internal part(s). And if I am correct, you will have to remove the transmission and have it reassembled correctly and possibly rebuilt if something got damaged.
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Eric Hi Performance Automotive Service (formerly OVO or Old Volvos Only) Torrance, CA 90502 hiperformanceautoservice.com or oldvolvosonly.com
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