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Flaky speedometer revisited

A while back I asked about my flaky speedometer in my '89 200TQ. 

It is still giving intermittent screwy behavior.  Sometimes it
works perfectly.  Then, for no apparent reason, it will start to
oscillate up and down.  Basically it's an on/off toggle with
resulting rapid up and down needle motion.  The period of the
oscillation is speed dependent.  Higher speed --> faster
oscillation.  Of course, when this is happening the odometer
does not work.  The computer readout (miles to empty, miles per
gallon, average speed, etc,) are meaningless (GIGO).  Likewise,
the cruise control doesn't work while the oscillation is

Problems internal to the instrument cluster have been
essentially ruled out.  I removed the cluster and checked all
solder joints, traces, etc., and all is OK.  It appears that
there is a problem with the speed sensor in the transmission. 
My Audi dealer mechanic tells me that to fix the problem he
needs to drop the transmission ($460 labor) and install a new
sensor (+ $$ parts).  

My questions:  Does this sound reasonable?  Is there anything
else I should try first?  Like, for instance, where do I find
the ground connection for this circuit?  What specific part(s)
will be needed?  (I think I need to buy a set of Bentley's for
my car.)


Bob  __________________________________________________      ^_____^
    | Robert L. (Bob) Myers  <RMyers@WVNVMS.WVNET.EDU> |    /       \
    |__________________________________________________|   (  O _ O  )
            Love M'Audi - Love M'Bimmer.                    \  (_)  /
       Siberian Huskies are better than either!              |  U  |