Enjoyed all of your comments - RE people are good people
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Took the speedo-odo-meter out and found it has the same problem as mentioned by GHG.
The bottom half of the speedo mechanism consists of a magnetic bowl connected to speedo cable. It is NOT attached to indicator needle.
The upper half consists of a free floating speedo-cup inside the bowl and it is connected to indicator needle on the dial.
As the magnetic bowl rotates fast with the speed of the front wheel, it generates a magnetic field that turns the speedo-cup - and thus the needle at a much slower pace. The speedo-cup rotational speed will also be affected by the torsion of the return spring.
In a defective unit the speedo cup and the bowl touch each other and loose contact rapidly and repeatedly. The needle then fluctuates rapidly.
(It is different from speedo cable going in and out). The second issue is why did the needle go below zero ? Normally the speedo-cup has a tab that hits a stop - a 1" tall metal strip that hangs down from frame, above the cup. But in the defective piece, the speedo-cup moves just a fraction of mm below so that its tab does not touch the stop. The speedo-cup can then rotate in all directions 360 degrees.
Tried a few things and it seemed that the speedo was working. BUT after it was installed on the motorcycle, it went back to being in a broken state
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Two possible reasons - either the top half has shifted down or the bottom half is pushed up.
I think that the spindle - connected to the needle - has worn out / is thinned out / or the holes for it have enlarged a bit. So it falls slightly downward due to gravity.
The other reason can be what GHG has mentioned that the bottom half moves up/down and touches the speedo-cup.
Note of caution - the chrome ring around the speedo case is crimped tightly. To take it off the case, it has to be un-crimped which causes some damage, cuts and small nicks.