That’s cool you got this fixed. The needle bounce is likely some kind of binding in the sleeve as you suspect.

I am a little late to this thread. For future reference you can build up these cables by brazing them with a propane torch and brass wire. Get the tips clean and flux them up with borax laundry booster.

My dad helped me fix my Volvo speedo when I was 16 this way. RIP dad. The tip had broken off and he made a new one by silver soldering a square steel shaft to the end of the cable. The speedo worked again but it bounced. I never figured out why (I was just a kid and just kept driving the car). Reading your thread it occurred to me the cable was too long. Dad must have rebuilt it a tad too long and it was binding in the sleeve. That thing is like a big spring so it slingshots as it binds and makes the needle oscillate.

Bouncy needles can also be remedied with greasing the entire length of the cable. But I bet you’ve done that already. Likely it needs to have it is either too long or too short by a tiny amount. You can test the theory by loosening the yoke a bit and backing it out while driving it.

__________________
79 300TD “Old Smokey” AKA “The Mistake” (SOLD)
82 240D stick shift 335k miles (SOLD)
82 300SD 300k miles
85 300D Turbodiesel 170k miles
97 C280 147k miles