'97 volvo 960, Orange W-mode arrow blinking, then lost power. What is wrong?

#p0705 the on board computer is not receiving any input from the Transmission Range sensor.Check wire harness and plugin at sensor for any damage or maybe it just came unpluged.If no damage could be found and it was pluged in propperly, then replace the sensor. Good Luck and have a good XMASS.

Check TCM for codes.

The lights indicate a problem with the transmission. The fact that the engine wont start, leads me to believe that the PNP (neutral safety switch) is the problem. You will have to have the vehicle scanned to make sure.

I'd get this looked at immediately, it's not the sort of thing that will go away. I'd start by checking fluid levels in the box.

The blinking arrow is an indicator that the automatic transmission is in the limp mode. Sometimes this problem will go away. Other times you must take it in and have the error code on the transmission read. This will explain what is causing the transmission to go into the limp mode. The limp mode is the same as the WINTER mode where it starts in 3rd gear.
The dash board gauges are controlled by a dimmer switch that is above the rear fog light switch which is above the headlight switch. If this dimmer switch doesn't work, then have it replaced.

This is indicating a fault is stored in the transmission module, very likely that the gear position sensor (GPS) has failed, it's very common. Check the codes, if it's a 3-1-3 code, you need a new GPS
http://repairpal.com/volvo-960-1995/common_problems

if oil level ok ?? then cost of repair is more than the value of the car

Where roy might have a possible source, it is most likely the park neutral switch which has started to fail. This is indicated by the shift arrow flashing on the dash. Replacement of this component is relatively difficult without a lift

It is in the engine compartment. Here are some directions - http://volvospeed.com/CheckEngine.php

i know this might sound unrelated but i noticed the same problem solved by chance when i changed the actual engine oil. i drained engine oil thoroughly (overnight) and changed filter. after running it a couple of times the orange arrow stays off, this problem reoccurs once the engine oil ages so i change my oil and filter every 5000kms. my guess is that some sort of censor reacts to the old oil as i'm not sure how the two are related.