On my 1995 Volvo 940 Turbo the oil light stays on constantly, the oil is at the correct level and oil appears to be pumping through the engine (I see oil flow in when I remove the oil cap); does anyone have an idea of what the problem night be?

If all else is correct and the wiring to the sensor is correct and undamaged then the sensor has failed. It's not at all uncommon and is fairly cheap. I don't recall exactly where the sensor is located, but it's screwed into the engine block and has a single wire coming from it.