Is it at the wheel and not in the differential? I my old 2wd E36, the speedo sending unit was in the diff and could get funky, fixed with a differential gear oil. As RB says, may be completely different in our E53s.

__________________
2006 X5 3.0 6-spd w/Evo UUC ssk
sport/premium pkgs
born Valentine's Day, 2006.