2006 S40 transmission failure
 

We have an issue where the car does not shift into any gear and has a gear chatter (for a second or two)when you return it to park. It has a 2.4L with no turbo. Any ideas would be great.

did you check the transmission fluid level? does it behave differently if you manually select a gear (ie go to Lo vs D? same behavior for Reverse as Drive?

Any other error signs ie a CEL or flashing TRAC light or ABS light? Next steps would be to get an OBD2 scanner and see if there are any transmission fault codes. First step would be to check the fluid level, second step is can for codes, then do a "shifter row" (park to lo to park 20x fast to clean up the PNP contacts). After that you may need to drop the pan to inspect the fluid and check for debris (ie wet clutch bits). If you have solenoid issues, hopefully the OBD scan will find a fault code. If you have black/burnt smelling tranny fluid you may have serious internal issues. When you check the fluid level, have a white paper towel or rag handy and wipe the dipstick on the rag. If the stain is reddish brown, the fluid is normal. If its black/dark brown, its burnt and may even have debris in the pan.

Thinking you may have a broken axle.