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I have the same problem on my 93 7.3 turbo 5 speed. I played with the cable to see about getting some of the slack out and it did get better. I still get some slight lag at certain speeds and I've noticed that at those speeds the speedo jumps slightly. I'm going to take the sensor out and clean it to see if it gets better but haven't got around to it yet. I don't use cruise that often in the truck and I don't remember about it till I take the odd road trip and end up using it.
The speed control system is designed to automatically maintain vehicle speed at any driver-selected speed above approximately 30 mph and below approximately 125 mph. The system is comprised of an electronic servo which consists of a throttle actuator with integrated electronics and other parts including an actuator cable, horn relay, driver control switches, a brake lamp switch and a deactivator switch. The speed signal is generated by the Programmable Speedometer/Odometer Module (PSOM). The electronic servo is mounted in the engine compartment and is connected to the throttle linkage with an actuator cable.
The Programmable Speedometer/Odometer Module (PSOM) may be part of the problem too....