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speedo flutuates up and down 700 1987

volvonut is right: I had exactly the same problem as what you describe and my diff ran dry too. (The lid was rusted through and I lost all the oil in about one hour of high speed highway driving). After I replaced the lid the speedometer was fluctuating, just as you describe. It turned out to be that toothed wheel hitting against the hall sender for the speedometer, which is mounted to the lid of the differential. The reason was that some of the bearings inside the final drive unit were so worn, that the whole assembly slightly moved around. At that point there were shavings in the oil already but I could not hear anything. A thick washer between the hall sensor and the lid fixed the problem (the problem with the speedometer that is) temporarily. I used the rear axle for another 30000 km before it became replaced, so there was lots of time to look around for good used rear axle. I hope I did not spoil your day and maybe your diff is still OK. I would definitely check for shavings in the oil and try to shim the speedometer sender with a washer. Although, it may be difficult or even impossible to remove the sender without destroying it and I remember that thing being ridiculously expensive.
I hope this was somewhat helpful.
Toby (740 TIC, 740 GLE)






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