01E Transmission Speedometer Only Works in Reverse

[iScheibe]

So like the title says. I have an 01E Manual Transmission in a B5 Passat. It a DUK transmission. The speedometer wasn't working for a while. Replaced the speed sensor but that never fixed the issue. Assumed it was internal. Opened the driver side flange on the transmission and found the speedometer gear had cracked in half. Dug it out and replaced it with a new one; Part #012409182C.

The speedometer still doesn't work but I found that it does in reverse. The speed sensor is the HT Brand (Hamburg-Tech). I can't see why the speedometer would work in reverse but fails to deliver the signal going forward. Its just a magnetic ring. My thinking is I possibly have a bad speed sensor incorrectly reading the speedometer gear? Its also makes no sense to me why it works one direction but not the other. Before I tear this flange apart again I was curious if anyone had any ideas? I am also ordering an OE speed sensor but something tells me that isn't going to fix the issue either and I'm going to have no choice but pull the flange again and inspect it.

[iScheibe]

Was able to do a visual inspection today through the VSS hole. The Speedometer gear isn't moving at all. I was able to use a pick and move it around and get it to intermittently move but still not consistently. I tried a new VSS as well but this showed no change. Not really sure how the speedometer gear has come out of his little notch in the differential. I'm thinking the bearing might be worn out and the play between the bearing and the race is allowing the speedometer gear to move around. I'll have to order more fluid and another seal and open this up again to see what can be done.