1996 960 okay i was driving out of my neighborhood and all of a sudden i turned the corner and the little flashing arrow started on my dash and 2 of the 3 lights next to the shift knob started blinking back and fourth...what does this mean?

NO VIN told, why post? lighting is not the same world wide by laws in every country so be wiring too.
flash fast means dead lamps or shorted lamps
car starts and runs and drives ok

head lamps all work only TURNS failing.
flash fast on dash and you did not look outside car
all 4 corners? really?
what if 1 of 4 lamps was dead?
the users guide tells you all that.
if flashes fast on dash look outside at the real lamps. turns;.
IT is a feature that flash rate is a warning,
and most are controlled by BCM body brain
that detects TURNS currents wrong, too high or too low. so you are alerted to fix it. now.
see?
NO VIN NO JOY, no books , no parts no service.
lacking a vin
the dealer will not talk to you lacking VIN
unless the car is smack in front if them.
see why? so they don't lie to you.

Does sound like its the ivm witch is located under the hood on the passenger side against the fire wall you will see a large plastic cover with allen screws remove screw then lift the plastic cover off the ivm is located in the upper right hand corner of the computer it will simply unplug ....make sure to disconnect the hot side battery before unplug it and then plug the new one in. they costs roughly 95.00 for the part at advance or auto zone.

I had a similar problem on mine, and found and after some head scratching found what the problem was, I'm not saying this is your case but certainly worth checking. Have you ever got into your car put the key in and it just cranks over but does not fire up, you then turn the key off and try again you might do this a few times then it will fire up okay and run, mine was like this and sometimes just cut out as I was driving, now as you turn the key on their is an immobiliser that comes on then goes off when started that's okay, but the times you sat in the car trying to get it started did the immobiliser light come on if not then the problem points to the transducer that sits around your ignition key switch as you put your key in this transponder reads your key and if it's the correct code your light comes on the dash then goes off when started as with mine I found that it was disconnecting itself and suddenly the car stopped, This is very easy to get to and remove so you can replace it if required, just remove the steering wheel shroud that's sits around the back of the steering wheel this will then expose the ignition switch assembly, on the barrel of the switch at the end were the key enters you will find the transducer it's easy to see as it as two small wires coming from it to a little plug for easy removal there is one small screw holding it in place.

Good luck

One of your bulbs is out. Turn your flashers on and walk around your vehicle to see witch one it is and replace it.

It sounds like its gone to limp home mode have the ecu codes read by your garage

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.

It sound like a starter or selinoid problem or just the starter relay or fuse you will need to have starter tested and if okay then move on to your relay and fuses to see if any of them are bad.

This is a common problem of Volvo S40. You can try this trick to turn off the flashing arrow light.

1) Turn off Engine
2) Turn key to "On" position (Not start the engine), you will see the panel light will on
3) Step on the break paddle
4) Shift the gear from "P" to "L" 10 times
5) Turn key to " Off" position
6) Now you can start the engine.
7) If doesn't work, you can repeat the procedure.

Hope this tick help
Good luck

it does sound like you are having a problem with an alternator.

Most likely the transmission range switch is failing.
Have someone check the transmission computer for codes.