I recently had my tranny rebuilt, but today I noticed that while in drive it would all of a sudden loose power in the tranny until you slow down, the of light would flash and the speedometer stopped working. Buy would run better when I slowed down.
Would the speedometer be the culprit for it not driving right?

The truck is a 91' superduty (4wheel drive tranny with the parking brake)
I've always had problems with it chewing the plastic speedo gear that is on the side of the tranny. Any ideas on why it is doing that?

 

yeah the transmission control unit needs to know the vehicles speed or it can't work correctly.
i haven't got the answer as to why your gear is getting chewed up though.

 

I decided to pull the brake off the back of the tranny and found the inner ring gear for the speedometer was wore out. Hopefully it fixes it. Would it also affect reverse to some degree?

 

No, it would not.