If the speedo is bouncing around, its more than likely either the cable or the gauge.
Not saying the tranny gear isn't bad, but personally I'd say its more rare to have the speedo drive gear fail than the cable or speedometer itself.
When you checked the cable, did you hold one end in each hand, and twist the inner cable while watching the sheath? The cable should turn freely, no binding, and the sheath shouldn't "twist up" or flop around when you turn the actual cable.