Key turns all the way but locks up right before the engine can start. Lights come on and everything else. For some reason about 2 out of 10 starts it will do this. Anyone ever heard of this or have any ideas what it could be?

The problem was that my girlfriend was pausing right before engaging the ignition and due to a safety feature to prevent theft, the car will not start. All you have to do is turn the key back to the off position and then quickly turn it to start the ignition.

It's likely the immobilizer failing which is a theft deterrent system that prevents the car from starting if it thinks it's being stolen. Apparently, faulty immobilizers are a common problem in S40/V40s. You can also tell on the dashboard where in the lower right-hand corner, there is flashing car icon with an "X" over it. This icon means the Immobilizer has been activated and hence the car won't start. In the Volvo-forum website, someone suggested locking and unlocking the doors five times with the remote, which sends a reset signal to the immobilizer. I tried this several times myself, and it seems to cure the problem each time.

you need to re ajust your link cable in you shifter (automatic). it gets loose and thinks it in a drive gear.