1983 Volvo 240DL manual overdrive question

When it first starts to engage, does wiggling the shifter a little cause it to drop out? If so your 4th gear switch is worn out, also does the light on the dash always work or does it fail to come on when the OD fails to engage? That helps narrow down whether the problem is electrical or hydraulic.

Shouldn't be hard to fix, you can get window regulators cheaply from a junkyard, also look to see if a clip is missing and caused a linkage to simply pop off or something. It needs a fair bit of work, but remember that it's two decades old, as well as it sounds like it was somewhat neglected, but from what you say it seems it's responding well to a bit of TLC as they often do.

Sometimes the light flickers on, them immediately off without my moving the shifter at all. OD doesn't engage. Once it does engage there's no instance of its dropping out.Today's test: I turned on the ignition while parked, then put it into 4th gear. After pressing the button 16 times, the OD light came on. The next time it took only two times for it to light, after which it came on flawlessly every time I pressed it.When driving after reaching reach operating temperature, it takes much longer for OD to actually engage -- +30 presses when I counted, with several (maybe three or four) flickers of the dash light.After that it does not fail to re-engage, even though the temperature gauge has climbed no higher. (It rarely does move much above the "C," except on long-ish hills.)If I wait longer to begin trying, on the route I always take, it still takes awhile for OD to function.

It was driven only an average of 3-4000 miles a year for the past five years, probably for in-town driving. Maybe it has to get "re-broken in." ;-) -NJ

Well it's definitly an electrical problem, I'd pull the relay out and check the soldering, that's the first step, and also check the 4th gear switch, sometimes it won't engage until it's cold, you can temporarily bypass it by grounding the wire that goes to it, if the OD then freely engages then you know the switch is bad.