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Michael I forgot to mention the differential is a Salsibury 10 bolt with volvo axle tubes - so I dont have the original Volvo diff. I had tried replacing the electric speedo with an earlier volvo cable speedo, but I encountered some problems there.
I have taken the opportunity whilst the US was asleep to review all the information you have all given me - I think that the Ford C4 Electronic Hall Sensor speedometer fitment + the Dakota SGI-5 E - through to the Volvo 3 wire electronic speedometer should work. It seems Summit Racing are the place to get these items.
The cable arrangement probably had the wrong gear ratio.
AND
That said, I had one alternate idea - I believe ABS 240s came with tone rings and sensors on all four wheels. Should it be, for whatever strange reason, impossible to get an electronic signal off your driveline, you could bodge in the front-end ABS parts and read the speed off one of the front wheels.