Toyota Repair: vss problem, transmission shift solenoid, odd symptoms

Question
I have a 94 Camry le v6 auto with 116k miles. I just bought the car for $750 and it used to die, but after replacing a semi-burnt/corroded fuse it runs fine, but I digress.
When totally cold my transmission seems to shift ok but when warming up or warm (when it's acting up, not always) it goes to 2500rpm in first with very low throttle opening, then goes to 2nd only momentarily before jumping to 3rd. Also when driving around town (30-50mph w/stop&go) it will randomly downshift into either 3rd or 2nd, sometimes up-shifting back on its own and others I have to go below 20mph and then accelerate and that takes care of it for a min or 2. Sometimes (more rarely than previous problem) it wont downshift into 1st at stop. I tried driving w/"ECT PWR" off and this happened, i turned "ECT PWR" on and it downshifted immediately and drove fine for the remainder of the day. It doesn't always work in "ECT PWR"-on though, just every once in a while.
It's throwing a few transmission codes: p0500, p0720 (which i understand to activate whenever p0500 is thrown), and p0773. My first question is: Would a bad vss cause a problem with the 'shift solenoid E electrical' as far as causing it to go into failsafe mode, or should I check both the solenoid circuit and vss?
On matter of the VSS, I got a reading at the ecu between SP1 and E1(brown ground wire) of 4.8v. (with cruise control box disconnected as stated in shop manual Also my speedometer is always within about 1mph of gps measured speed. Would it be a problem with the circuit in the multimeter (wave form shaping circuit) which i read about in the toyota manual, or more likely a wiring issue between multimeter and ecu?
Sorry about the long question, I felt like giving all the odd symptoms might help. Thanks alot for your time and assistance

Answer
The P0500 is a speed sensor code, the other two are transmission shift solenoid malfunction codes, in most cases thede solenoid codes come up because the transmission has an internal malfuction and the solenoids get clogged with metal particles or friction material, how does the fluid look? Is it clean and up to the full mark? Remove the speed sensor from the transmission it should be right on top with a wire on it, the sensor is magnetic, inspect it for any metal particles being stuck to it, if necessary remove the trans oil pan for inspection I'd hate to see you put a lot of money in a transmission that has to be replaced.