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This is a bad connection problem:
I caused exactly the same symptoms on a friend's 88 745, when trying to correct a speedometer problem (which I caused by changing the rear axle.... long story).
With the speedo wiring disconnected from the cluster, you get what you describe. I assume one of the speedo wiring harness wires is a main ground to the cluster. Check that connector- basically center bottom of the cluster. The early cars have a cluster that's surprisingly easy to pull. Screw under the little blank plates at the bottom corners.
Good luck!
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Rob Bareiss, New London CT ::: '87 244DL/M47- 234K, '82 245T/M46-182K, '84 242DL/AW70-100K, '89 244DL/AW70- 212K and I miss my: 86 244DL 215K, 87 244DL 239K, 88 744GLE 233K, 88 244GL 147K, 91 244 183K
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