123's are notorious for slipping odometers, but the speedo continues to work. My guess is you have a broken cable, which drives both. You would have to remove the cluster by pushing it out from behind and then disassembling the lights and speedo cable. Replacing the cable is an easy dyi project. Use the search, there are lots of posts, especially in the diesel form.

Good luck!

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1976 240D
1987 560SL
2007 E320 Bluetec
1998 C280 (now son’s car)
1982 240D Manual - Sold