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Assume you put the C-clip back on the wheel hub for the speedo cable and it has no kinks or sharp turns up to dash? Cable runs free in housing and is lubed? Think you said ODO works fine - so its either dirty or needs lubricating (the white grease used in old VDO gauges turns to hard past) - or the plastic gears are worn/stripped/cracked.

Whose Speedo is it? If its a real VDO speedo take it a part and clean and lubricate it. You can get replacement gears. If its Brazilian/Chinese replica then have guts replaced by place like North Hollywood Speedo (do search here on Tach - also instuctions for carefully removing the bezel). If its the CMC's Vintage series - look here or on ebay for a replacement (for a VW based car) or replace with higher quality gauges (914 gauges are popular and can be found for reasonable cost - Big tach in center is nice).

Replacing with same unit is simple swap (take photo of wires and do diagram). The CMC gauges are larger than VDO gauges by 1/4" - so swap takes fiberglassing/filling dash or a trim spacer. VS has replacement 356 replica gauges - or you can recondition old 356/912/911 ones. (Early 356 used a cabled driven tach and many were 12 volt). Other than original gauges may take different sensors too.
Before you do all that and assuming that you routed the new cable exactly the same as the old cable, first try removing both ends and re-routing it such that the bends are gentler (i.e.; wider curves).

What's happening is that there is a bend somewhere that is just a bit too tight, causing the cable to "catch" within the sheath until the wheel rotates a bit more which overpowers the catch and releases the cable which then "pops" back and then goes through the same process over and over again causing your needle to bounce repeatedly.

If you have a Speedo cable that's just long enough to reach but you have to really work to get it on there, then you might try a longer speedo cable - like for a bus. The ends are the same, but it's something like 4+" longer and makes it easier to route the cable with nice, big curves. Most of the suppliers note how long the cables are (at least Mid America did when I bought one last.) Sorry, I don't have a part number for ya.
For a good lube product for a speedo cale, I suggest "Dry Slide". It's a motorcycle lube made from Moly-di-sulfide. Goes in "wet" using gravity, and "drys" in a few minutes providing a long lasting "dry" lube which will NOT attract dirt.

If your cable has been previously greased or oiled, be sure to clean it in a solvent, as best you can, before applying dry lube.
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