[Adventure Bob]

Sounds like your sending unit is bad. Which sensor did you replace, the one on the trans or the one on the t case? The speedo is just a receiver for frequency; if it's reading incorrectly, genreally its getting the wrong signal. The fact that you get a fixed MPH reading would lead me to believe that the sending unit on the T case is gone bad, regardless of what gear is in it since you say you've tried both index positions.

 

[Adventure Bob]

Thats the correct one. Was it doing the 40MPH before you changed sending units? Or was that the reason you changed it?

 

[Adventure Bob]

The grand has three ways to sense speed and depending on the difference between them it does some things. But only the speedo sensor on the t case feeds the speedometer. There are the ABS sensors at each wheel, the speedo sending unit at the t case and a speed sensor in the transmission if you have an automatic. The speed sensor on the transmission doesn’t feed the speedometer circuit in any way, neither do the abs sensors. So here’s the logic of the grand: If your speedometer reads greater than the sensor in the tranny, it changes the shift maps depending on what it reads. If your speedo sensor sends a 50 MPH signal and the tranny registers 10 (it’s actually just reading frequencies from the sensors) it tries to help select a gear to limit the wheel slip. If your wheels, as sensed by the abs sensors, are moving faster than the tranny, it tries to do the same thing. If you have a 249 and the back wheels move faster than the front then the VC locks up, the speedo sensor on the t case is moving faster than the tranny sensor and the front wheel abs are slower than the rear. The computer thinks Oh crap! and shifts up and hopes you won’t keep your foot planted.
While that’s a long explanation, the tranny sensor doesn't register speed to the speedometer, it’s only there so the computer can play shifter mom.
Somehow you’re getting a constant signal at a frequency that the computer interprets as 40 MPH, not a variable frequency at a constant voltage as is intended. I would guess there’s a short somewhere.

 

[Adventure Bob]

So it was on the actual speedometer circuit board? Wow that seems odd that you'd get damage there without someone having opened up the dash.
Glad you got it fixed.