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Dear OnlyVolvo,
Hope your well and stay so. I concur in your conclusion. Raise the car's tail end (use jackstands!!!) and examine the two wires that enter the sensor. I'll bet one or both wires is/are corroded.
In what was plainly a defective design, the wires were left exposed to road salt, water, etc.
If a wire is near-severed, spray the wiring harness connector housing with a corrosion-remover, e.g., DeOxit. This may improve the connection so that the signal reaches the speedometer.
If so, you should gently wrap the wiring harness connector housing, the exposed wires, and the top of the sensor with butyl rubber. This black, sticky rubber - often used by auto glass installers - does not harden. When pressed gently with fingers it forms a single mass, so becomes a protective "boot", that will keep water, etc., from further damaging the connection.
If one or both wires break-free of the connector housing, you'll need to disengage the wiring harness connector from the sensor's housing. That process, too, will be eased by liberal application of a corrosion remover.
With some luck, you'll be able to disengage the wiring harness connector from the sensor's housing. If so, you'll need to clip away a short length of corroded wire, and then solder clean wire to the connector's round pins.
Please post back with your findings!
Hope this helps.
Yours faithfully,
Spook
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