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Temp Gauge Goes Wacky then no A/C

Sometimes on hot days the outside temperature gauge will read something crazy (like 17 degrees instead of the real 95 degrees). Then the A/C will absolutely not blow cold, instead will blow warm humid air. If you are lucky, then the gauge may begin to climb and you might get cooler air.The A/C only works “full blast” if the gauge reads the ‘real’ outside temperature, otherwise you are stuck with no A/C.The Volvo dealer basically said I was crazy, and that the A/C is in no way connected to the outside temperature, so I haven’t taken the car in to them.

You need to find a better dealer or a good independent shop.
The climate control uses the outside temperature reading to determine how much to cool or heat the air for the cabin to get to the interior temperature that you have set.
Your exterior temperature sensor (usually in front of the radiator) is failing, or the connector to it is bad/dirty, or the wiring to it is shorting somewhere (or pulling open), or the module that reads the exterior sensor has a fault.
There’s a troubleshooting procedure to follow to figure which of the above is the problem.

Thanks for your excellent reply. By troubleshooting procedure, do you mean one that a professional will follow, or one I could perform?

Either one, but you’d need the factory service data and the right test equipment to run the tests.

I’d start by finding the sensor. If it looks okay physically, then disconnect it and clean the contacts on the connector and reconnect it. You may get lucky and have that correct it.