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Went to auto zone the other day just in case they might have a vehicle speed senser. What they gave me doesnt go on/in the rear axle housing,it is located on top of the transmision? Is the one on the axle an ABS senser? I am having those kind of troudles,ABS light on,OD light frashing,speedo not reading till after 35mph...
It is on the rear axle like pocket said. I don't know about the VSS but there have been alot of problems with aftermarket sensors. I prefere to use motorcraft replacement sensors, alot of times you can get them from ebay for cheap or from Ed at discountfordpartsaty2k.com.
I had the same problem with 99 F350 about a year ago.. Replaced the VSS with a Napa p/n 530780 (they call it a ABS sensor), top of rear end, for $10.49 (see napaonline.com ) and it been good ever since..
Get it from napa (online if possible for ~$10) - i paid $22 at the counter - it's an easy swap if you've got somewhere warm & dry to use for about 15minutes - i had the same symptoms and that sorted me quick