Hi Erling,
Sometimes you can nail this one just by a look at the wiring where it leads to the sender in the diff. The wires between the connector in the trunk and the sender on the differential are those high-strand-count silicone-insulated once-flexible and special wires made to survive bending and flexing. After a number of years, the silicone insulation falls apart, either shorting the wires to each other or ground, or no longer supporting the wire inside causing a break.


These pics are from a later car with ABS, but the principle is the same. Then, if you have a look and it seems the wires are in good shape, I've done some further diagnostics to find a loose connection at the back of the speedometer itself:
http://cleanflametrap.com/speedoDiag.html
Note, in the above link, an AC transformer is used to substitute for the AC differential signal, and those are really getting scarce, even in my junkbox. In fact, many DC power supplies are labeled "AC Adapter" so it is easy to be misled about which way the greenies go and how quickly they change direction (50 times a second where you are). I have another method using a smartphone to generate the signal if you get to that point.

--
Art Benstein near Baltimore
"In the midst of winter, I finally learned that there was in me an invincible summer." -Albert Camus
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