I was about to order the part at one dealership for $197. Called another morning another dealership and it was $108 (first one is really bad, I was their customer for a while). But when I was describing the service department guy why I needed it for, he talked me out of buying it, saying it would unlikely help and I would waste my money. In the end he even advised an independent Volvo shop (a dealership employee!!! - I love them now).
The shop was nice, owned by swedish native guy plus two employed mechanics. They scanned the Volvo with DiCE, pulled bunch of codes and nothing on the transmission or the neutral position sensor. Karl (the owner) told me it would be highly unlikely it was a sensor; rather a transmission, per my colorful story. He said what they could only do was to install Volvo factory rebuilt tranny for $5k. They charged me nothing for scan; advised a transmission shop though.
The shop is nice on yelp, **** hole from outside, family owned since 1963. The guy listened to me, and very soon concluded that was a mechanical problem indeed. He quoted about $2900-$3300 to get it done (he had several cars in including newer Volvo XC).
So my better half is against investing any more money into this Volvo. I pretty much agree; I do not know what the transmission will last after $3300 job.