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I had an issue with my speedometer bouncing around as described.
There is a sending wheel inside the rear drive unit which spins with the crown gear and the sensor reads the pulse as it spins. It had broken free and was freewheeling on the hub. The dealer tried a quick fix of Loctite and staking it to the hub but the fix didn't last six months. Ultimately, the rear drive unit was replaced. The mechanic discovered it by removing the sensor, poking a thin screwdriver into the hole, and gently trying to spin the sending wheel.
Good Luck,
Fred
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