Transmission sticks in winter mode

I have a 1993 "960" with auto tranny. On occassion, and now more often, the car will go into Winter mode automatically. The lights on the dash and on the gear shift will flash on and off between E and W. Sometimes, the car will go ahead and start in 1st gear even with the lights flashing.

If I shut the car off and then turn it back on, most of the time it will at least start off in 1st gear and shift fine from then on. Most of the time, but not always, the lights will also go off after I restart the car. But now its doing it almost daily when before it only happened once in a while.

Anyone else had this trouble and know what it might be. The car has 250,000 miles, but is in nearly perfect condition, so i'd like to get it fixed if possible and it won't cost too much.

Thanks in advance for any input.