I have a 97 f250 with 355,000. I had transmission issues last year and put a used transmission in . It shifted a little hard but it is a e40d. Sometimes while driving it would basically act like you were in nuetral. Also would shift funny. The OD light was flashing so I put the computer on it . Bad cam sensor and P500. I went to ford and got a vss. Put in and the truck worked like a charm . Also got my cruise control back. It starting acting up again. Then would be fine . I bought another sensor and worked. It acts up every once in a while . When I shut the truck while driving and turn back on it picks right up with the speed . When the od is flashing and I do the same thing the trucks acts like it is in neutral.. Not sure if it matters but my alternator gauge is all over the place . I did test the batteries and the alt and they are at a steady 13.5 or so Thx
Check out the wiring that goes to the VSS. That harness tends to rub on the shocks and suspension back there and a chaffed wire or two would make it look to the PCM like the VSS isnt working.
Also pull the VSS and make sure there isn't a bunch of little metal shavings stuck to then face of the VSS. If there is metal in the oil from worn gears or bearings and it sticks to the magnetic sensor, it will affect the readings it gets.
Wherebdid you get the VSS? Is it a Motorcraft part?