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Bad PSOM.
PSOM = programmable speedometer/odometer module, it receives the signal from the VSS and sends it to the PCM. It also stores the mileage. You can get them rebuilt or buy a used cluster at a junkyard, but whatever miles the donor rig had will now show on your rig. Also if you end up with a used cluster out of a different year rig swap the speedo into your cluster or you will end up with random lights on all the time.
Update. I went out to my truck tonight to get a bag and heard something that sounded like it was running. searched around and pinpointed it to the speedometer area. As a side note the picture above the speedo and display stay the same whether running or with the key out of it. Anyways after hearing what sounded like something running I decided to disconnect the batteries to avoid a possible fire. So I decided to reattach the batteries, ran the calibration procedure and the needle did the sweep and settled at 0 where it should be. I took it for a short drive, gave it a little bit of hell and now seems to be fine.
I took it to a guy that works on diesels and his snap on scanner was saying that there was no signal from the sensor. Not sure if because the the speedometer was pegged throwing it off?
So you think the psom is bad or going bad? Can it go intermittently? I did have similar problem last fall but "cleaning" the sensor seemed to fix it that couple of times. Then I changed oil in the pumkin thinking maybe the dirty fluid was causing the problem.
Yes the PSOM can be intermittent. When mine went in my old 95 gasser it went nuts for about 5 minutes on one trip, then was fine for over a year before it crapped the bed. As luck would have it mine crapped out before I needed to come home pulling a 28' camp trailer so I had to drive 12 or so hours with no cruise and the speedo going nuts the whole time. Trans fluid took a BEATING.
You have to send it off and it gets worked over... can't recall the company right now but I'll try to find it for you. The PSOM is integral to the speedometer, so when you pull your cluster apart it will be attached to the speedo.