Although I've titled this automatic transmission, the problem may be elsewhere. My car is a Volvo 1997 V70 wagon 2.4 DOHC Engine B5254S.
Recently replaced timing belt, tensioner, auxiliary belt, water pump, camshaft seals and resealed upper cylinder block.
Here's my issue.
On Sunday March 12 while rounding the roundabout I gently accelerated when I heard a clunk and the car rolled to a stop. Engine still running but no movement. Tried selecting reverse and drive and got nothing. When I tried to move from Reverse to Park there was a grinding noise, like gears meshing. Noise stopped once Park was selected, however the Park function did not work as I could push the car.
Had the car trucked home and did the following:
1/ Jacked up front wheels on stands. Turned RH wheel by hand and LH wheel would turn in reverse - also did same with LH wheel. This was while drive selector was in Park.
2/ Checked under car for disconnected axles etc - everything looked ok.
3/ Checked that drive selector actually moved the selector on the transmission. No broken or loose cables.
4/ Started engine and engaged Reverse. Both front wheel spun backwards.
5/ Lowered car to ground and did a few drives up and down the driveway. All seemed ok.
6/ Took car for road test - drove around neighbourhood, over speed humps, sharp left and right turns, rapid acceleration and deceleration. No problems.
7/ Took car to church meeting March 16 (about 5Km). On the way home as I tried to accelerate out of a corner (LH) the same problem occurred. No clunk this time just rolled to a stop. No Drive or Reverse when selected and same grinding noise when going from Reverse to Park. Park not engaging.
Had car trucked home again. Next morning jacked up the RH (driver) side of the car and placed on stand. Wheel could be freely turned by hand even though Park was selected.
Decided to try something else. Turned on engine and engaged Reverse. When I did there was a grinding noise for about 20 seconds then just normal engine noise.
Stopped engine, lowered car to ground and voila I now can select Reverse and Drive. Only doing this up and down the driveway. Don't want to call the tow truck for a third time.
Hope someone can assist me with this very unusual issue.

 

The grinding noise when selecting park the first time is telling you that the final drive was spinning while the car is stationary. Later evidence shows vice-versa also true. This limits the source of the problem to a very tiny spot. It's between the tires and the final drive where the park lock engages. There are a very small number of components in that area.

So I think that the left side axle popped out. When it's not locked by its little snap ring it could pop in and out of the splines. The right side can't really get loose because of the bearing.

If it's not that, then you be the judge whether it's broken inside the transmission or outside. That part of it should be pretty obvious.

 

Thanks Firebirdparts, I will pull the left wheel off and take a very close look at the axle etc.

 

Firebirdparts. I have removed the LH axle and cannot see any damage to either end. If the axle had popped out of the transmission end then I think I would have had to do more work to replace it. Needed a lot of work to get axle out of hub and axle out of transmission. Do you think the PNP switch could be an issue?

 

I have never had one of these transmissions apart, so I am not qualified to comment any further. Again, if the final drive is spinning but the car is stationary, it sounds like to me you've got a hard part broken in the final drive. I admit it's surprising to me that it worked correctly part of the time. I would be expecting it to lock up if I had it. These transmissions have what I consider an ordinary bevel gear differential. The parking pawl actually works on the transfer gear, so the problem might actually be transfer gear to differential gear mesh. In any case I am over my head and I admit it.