5.7 liter engine 1999 GMC Cutaway.
The vehicle speedometer was erratic and the transmission would shift in and out of 2-3, 3-4 depending on speed. Very harsh shifts. No fault codes were stored in the PCM.

During a test drive I recorded scan tool data for review.

Let’s review the information in the graph:

VSS is generated from OSS sensor in the PCM. Knowing this I decided to scope the OSS sensor.

Amplitude was all over the place. If it was tested using a DMM instead of a scope it would show up as ok, about 0.5 AC. Which is why a scope is superior in finding faults like this.

What’s wrong with the pattern: The fluctuation of the zero point. if you look closely the amplitude changes each cycle. When I saw this I thought one thing, air gap had to be changing. Why else would voltage peak change during the same cycle?

I pulled the driveshaft from the vehicle and installed a dial indicator.

You can see the amount of movement in the shaft. The arrow indicates direction I am pressing.

This proved my theory. The output shaft bushing was not good. There is a drum inside the transmission that the tone ring for the OSS sensor is welded to. The bushing for the drum was no good causing and air gap change between the sensor and the tone ring.
I veryfied this by removing the OSS sensor and putting my finger into mounting hole. Once I could feel the tone ring for the sensor I moved the driveshaft back and forth. There should be little to no play and there was quite bit.
The photo below shows locations of ISS and OSS (labeled as VSS).

The transmission which was rebuilt within the past 30 days had to be disassembled and repaired again. The bushing was replaced and everything returned to normal.