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Ken,
If you remove 2 small screws in the front of your gear selector cover you can pull it up and access the start inhibitor switch adjustment on the right side of the selector mechanism.
Check that N and P marks on inhibitor switch are opposite the small switch lever in neutral and park positions. If not - unscrew 2 bolts and adjust switch.
From Volvo manual: If reversoing light flashes when vehicle is reversed, move switch contact 1 mm (0.04 in.) forward. After adjustment make sure that vehicle can only be started in "P" and "N"
Hope this helps.
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