I have a 2001 V40 with 158,000 miles. I do a lot of highway driving. About two weeks ago, after starting up (I was at a filling station), I got the blinking upwards arrow. Car moved like it was in 3rd gear. After hitting the "W" button, the arrow went away and the car drove fine. A week later, the arrow came back, this time accompanied by the CEL. Nothing I did made this go away. The car drove fine (I had 100 miles to get home). Actually, the car drove better than fine. Shifting was very smooth. When I got home, I checked the codes: 700 & 705. I deleted the codes. This was a week ago: the car drives fine, just like nothing ever happened. The trans fluid was flushed a little under two years ago. What the heck was that all about??

 

this worked for me...but then again I wasn't getting a CEL...I hope you sort it out.

Flashing transmission light - Volvo Owners Club Forum