2) Are you sure that's not the Check Engine light? In my 92, that's the second lamp from the left, and while memory of Lambda-sond lights is a little hazy at this point, I think it was in that location. Near it anyway. And resetting the computer would clear it...

1) Check the number at the bottom of the speedo. Assuming it's a non-ABS car (ABS became available as an option in 1991), the K number should be K10042 for a sedan, K9800 for a wagon. If it's a sedan speedo in a wagon, it ought to read slower, so I don't know why you're getting high readings. There isn't anything you could do to screw up the readings. Only problem I've seen with them involves metal bits getting picked up by the magnet inside the speedo head, and the needle sticks or tops out at a low value.

Good luck with it!
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Rob Bareiss, New London CT ::: 92 244-M47-208K ::: 90 745GL-M47-271K ::: 88 245DL-AW70-182K ::: 84 242 project ::: 70 VW Bus ::: 70 Bus SInglecab Pickup ::: 71 VW Type III Notchback