Then I think you are looking at getting a module.

I agree with you. Not what I wanted to do in terms of cost but this is the path I chose when I bought this vehicle!

If you raise the vehicle, remove the rear wheel speed sensor put the vehicle in neutral and slowly rotate the back wheel with some fine sandpaper on a popsicle stick rubbing gently against the pick up surface, you may clean off the surface and solve the problem. We do a lot of fabrication and grinding in our driveway and when I had the same problem, I had picked up some metal filings on the speed sensor and pick up surface. Welcome to the rust belt. You can also get corrosion in there and get an interrupted signal. I chased this for an annoying length of time until I cleaned it.

The reluctor ring is in the bearing rear seal. So I wouldn't touch it with anything abrasive.

https://c1552172.ssl.cf0.rackcdn.com/1504073_x800.webp

Only enough to clean it off. I agree with you. I looked down there with a bore scope first and it was pretty crud filled. Short of replacing the part, this was my best option.

Brake cleaner (and compressed air) should be enough. If the plastic surface on the ring is damaged the bearing should be replaced anyways.

I know it's been awhile but I thought i would throw an update here. I have since sent my abs module out to be repaired and it has come back. After installing it my trifecta remained but after scanning for codes, I found that I only had one code remaining now: front passenger speed sensor. Excellent!
Ordered a new one but was at the wreckers anyway so I pulled one from another X5. Plugged it in at home and immediately upon startup, all lights gone! Went for a boot around the block and almost immediately the car was angry. Sounded as if the transmission/transfer case were fighting, could barely drive. Unplugged the sensor and went back to before. Turns out, the two speed sensors were different. I do remember the X5 being an 8 cylinder face lift model but I didnt think they would have different sensors but apparently they do :dunno:
So, new sensor will be in this week but I believe it's safe to say that the module rebuild was the culprit all along! thanks for the tips and if anyone needs a rebuild, great company in Mississauga, Ontario: Xemodex. They do all manner of electronic repairs and my module has a lifetime warranty, $400cad.

Thanks for the update! ;)