I tried cleaning it before i went and bought a new one. So you are saying check the movement were the driveshaft goes into the back of the transfer case?
Yes, the yoke on the end of the shaft that goes into the transfer case rides inside of a bushing in the tail shaft. If that bushing gets loose, it causes problems at slow speeds with the VSS reading. as it can drop the whole mainshaft down and increase the gap o nthe VSS to tone wheel.