I had very similar issues, but before it dropped to zero the needle starts jumping to crazy speeds, according to the Speedo I was going round a roundabout at 145mph but then it would drop to slower and slower indicated speeds untill nothing. It sometimes go's up when I slow down, I've checked all connections, wiring and sensor, can't find any problems. Seems to have stopped doing it now but have become very good at judging speed from the rev counter, if that plays up I'm buggered.
If anyone finds a solution I'd be right interested.