No 4th, especially when it begins intermittently failing and solenoid and wiring is eliminated, can be that the seals for the 4th (OD) clutch are worn or the friction linings are worn.
If it is hardened seals then the products that you add to fluid to rejuvenate seals is a worthwhile gamble.
I have no favored product but Lucas makes a product and another one that has been around for years is Trans-Medic.
I am assuming that the power supply to the 4th (OD) solenoid has been checked. That year should have power to solenoid in order to have 4th gear.
1988 Volvo 245DL Overdrive
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