Toyota Repair: Speedometer bounce, speedometer needle, insulation problems

Question
Ted, I've got a 99 Camry LE w/a140e transaxle.  I inherited the car and don't know the service history (104k miles).  The problem is a bouncing speedometer needle.  Oscillation of bounce increases with vehicle speed.  Usually, this would indicate that the VSS is bad or a wiring problem.  Well, I replaced with a used known good VSS and noted no change.  Broke down and bought a OEM Toyota unit ($) thinking the used one wasn't really good.  Still no change.  Followed the three wires from the transaxle to the instrument cluster and to the PCM.  There were no open wires.  No wire insulation problems.  No chaffing.  Seemingly, no problem.  On a whim, I swapped in another whole cluster.  Still, has the bounce.  

I can look down into the differential and see a black ring gear that drives the VSS shaft.  There doesn't appear to be any damage to the gear "grooves" that I can detect.  I really don't wont to remove the carrier casing to change out the drive gear, if it isn't the problem.  Is there something that I'm overlooking or is there a problem in the drive gear/differential?  

There are no unusual noises and the trans shifts up, but, as you would expect, the TCC lockup is hunting.  It's parked for now, until I can get this worked out.  Thanks so much for any insight you can provide.

Answer
Since the problem is not he speed sensor, the wiring or the instrument cluster it seems that there may be a problem with the drive gear in the transmission, if you have access to a scantool that can read vehicle speed connect it and see if the ECM is receiving the vss signal from the sensor while driving. If the scantool sees the same erratic measurements then the problem is in the transmission, the computer gets the signal first, then it's sent to the speedometer so the computer is not getting the signal it needs from the sensor and causes the erratic readings on the speedo.