The problem of the metal gear spinning on the shaft is only for mechanical speedos. The 126 cars all have electronic speedos. They all have plastic gears and while there are a number of senarios for reduced indication, its not likely a gear problem if the numbers work smoothly and the reduced mileage is consistant.
Its more likely that one of the calculating circuit capacitors is bad. its possible the unit could have been built with the wrong gear ratios at some point but the calibration is to run a frequency derived by the "K" number on the back of the unit into the input and this will run a mile a minute and 60mph.
Bosch Master, ASE Master, L1
33 years MB technician