Volvo: 88 Volvo 740 GLE AT Overdrive, volvo 740 gle, volvo 740

Question
I have a 1988 volvo 740 GLE auto-trans and I am having troubles with the overdrive.  It only works when the car is cool.  After a short while it will just go out of overdrive.  I don't know if it is the relay, the solenoid, or tranny issues.  After driving it a while without overdrive, it starts to put off a burnt oil smell.  One other detail.  I got into an minor accident on the front right side and it seems that these problems began shortly after.  There was very little damage to the vehicle and the impact was not bad as well. but could that jog something loose?  I read in a repair manual that if I get a burnt oil smell that I should flush the radiator and tranny fluid and start new.  But all my fluid levels are where they are supposed to be. Help?  

Thanks,

Austin

Answer
If you smell burnt oil while using the overdrive, and it is in fact coming from the transmission, I doubt your recent fender bender had a direct cause in the problem, however it could have aggrevated a problem just about to rear its ugly head anyway.  In any case, burnt oil ususally means an internal and rather serious issue with the transmission, like failing bearings.  To isolate the problem, I would first have the transmission flushed and refilled.  If the burning oil smell persists, then it is time to have a mechanic look at the overdrive unit itself.  They bolt onto the back of the transmission and do fail periodically.  Worst case senario, you'll have to either rebuild or replace the overdrive unit if it ends up being an internal failure.  The good news is that this procedure isn't as bad as failure in the transmission itself, which would be a bit more costly.  First things first though, flush the transmission and see if the problem remains.  Good luck!