Tom -

You have done the right things so far. Those relays are not cheap, so it's one of the last-to-buy items, so also is the solenoid.

When the system is energized the solenoid will "click" and then the trans will engage o/d at the appropriate speed.

Have a helper engage/lockout the o/d (so that the light functions) while you are underneath with a hand on the solenoid. You should feel and/or hear the "click". Is YES your problem is in the transmission. If NO then

(1) Use a test light or VM to see if the solenoid is getting 12volts.

(2) Got volts? It's a bad solenoid. No volts, then either the wire delivering the voltage is open or the relay is not working right.

(3) Check the wire from the solenoid up through the shifter housing and to a connector that's usually under the carpet near the shifter cover. There are a number of places where chafing can damage the wire. My most recent Volvo green manual for wiring diagrams covers the 1988, and that wire is white. The connector has the white and two green wires.

(4) No wire problems? Gotta be the relay.

(5) If you can get one from a salvage yard (be sure it's from an auto trans) you can swap, and then find a way to re-solder the original one.

My parts book shows p/n 3523804 for all 1985-93 with AW-10, 71 or 72 so you'll have many years to chhose from.

Good Luck,

Bob

:>)