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I would say that this sounds like bad capacitors. I would bet that if you take the speedo head out of the cluster you will see some grey looking electrolyte goo on the circuit board all over near the two ic's which is the telltale sign of dead capacitors. If there is junk on the board you will need to clean the goo off with alcohol or acetone and replace the electrolytic capacitors with ones of the same value (I would do them all). If you do not see any traces of goo it is possible that the problem is just with the one large 220 uf filter capacitor since that would allow extra ripple voltages into the speedo. You can pick up most of the values of capacitors that you need at radio shack but I generally get mine mail order from various parts houses since they are of higher quality and I can get the exact value and voltage I want.
Bad instrument cluster grounds have also caused problems such as the speedometer registering 50 mph at rest. I would start with checking the sender wires and connections since that is the easiest. I would then check the connections and grounds around the cluster and then move on from there.
I would also generally suspect the speedo heads as being more problematic than the sender on these year cars but then again I have never seen a failed sensor so I do not know what that would look like. Perhaps others can help you with a diagnostic for the sender itself so that you can be more sure of the problem before you tear the cluster apart which can be tedious.
Best,
Mike
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