Vehicle is a 2004 XC70 with 138K miles. I recently observed what looks to be ATF inside the coolant jug. Extracted some and let it sit on the bench until it separated. Sure looks like red ATF floating on the top of the Volvo green coolant (picture attached). HOWEVER, there does not seem to be any coolant in the ATF. The fluid level for the transmission fluid is perfect and it's a nice bright red, not milky at all.

Is is possible for the transmission cooler lines in the radiator to be releasing ATF into the coolant WITHOUT contaminating the fluid inside the transmission? I would think there would be cross contamination. Thank you!

 

Yes, you need to replace your radiator (that has the transmission cooler in it)

And yes if the pressure in the cooling system exceeds the pressure in the transmission cooler it is possible for coolant to get into the transmission - so I would solve the problem as quickly as possible. Antifreeze/water is heavier than oil (as seen in your cup) - so it will sink to the bottom of the transmission - and become the first "lubricant" to be picked up and fed to the transmission. Antifreeze and water do not lubricate very well.

If it were my car I would at least do a drain and refill on the transmission (with the correct fluid) after radiator replacement - that's cheaper than a new transmission.