This can be quite commen and I suspect is a worn overdrive unit or a faulty solonoid.The symptoms of a worn unit are when you come off the gat the gear engauges and then drops out when you get back on the power.
If this is so, probably the overdrive pump is worn or it is low on ATF fluid.
Top up with ATF first. If it is full then you can use a thicker gear oil but eventually it will all end in tears.
However, check the connections to the solonoid on the rear of the unit first. If these are good you could try a different solonoid but I have never heard of one fail.
Fishing an overdrive off the back of the box is a real pain and has to be spotlessly clean, so if you can get a second hand box with an od all is better.
The Overdrive was designed and made by Laycox, a firm in Sheffield UK. One of the developers lives opposite me and even though he is in his 90s he is a mine of information.
The mark one fitted to MGB's had only one fault. It never wore out!! The mark three is fitted to your volvo.
Regards,
David.
