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Alright, so I took my sensor off today - same grease inside of it. So as soon as i find one, I'll be replacing it. Just a question though, mine has the sensor part which is attached to the tranny, and then the plug that comes out of it as well. Did you change just the part in the tranny or the whole thing - plug included? I'm going to be taking a plug off a wiring harness my friend has sitting around for his old car, but putting in a new sensor... maybe the plug is the common factor in your problem?
Also, maybe there's a fuse blown from before you changed it that needs to be replaced? I may be waaaay off here, but I noticed that the wacked out speed sensor has been blowing my 7.5 amp fuse in the under dash box (number 15 fuse) which connects to the alternator and a bunch of other things. Maybe get at your fuse box and see if anything's blown under there.
The cool thing that I've learned about running codes is that there's a big long system that tells you exactly what the code means, how to test it out to find out what's causing the code, and then how to fix it. I know that here we have a program called "Mitchell" which goes through the whole diagnostic and repair process... your shop probably has something along the same lines.
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