This is a common failure on almost all VDO speedometers, including the one in my 66 230sl.
The numbered wheels are on a shaft that rotates one turn per mile (km on metric speedos) at the right end of the shaft is a pot metal gear the same diameter as the digit wheels, a system of cogs on another shaft allow the ones wheel to advance one mile each time the shaft and gear make a revolution, the tens wheel advances one increment each revoloution of the ones wheel, then the hundreds, thousands, etc. the pot metal drive gear is a press fit onto the shaft and over time works itself loose and starts to slip on the shaft.
The fix is to take the speedo completely apart, and using a small very sharp chisel that I made just for this job and make several parallel staking marks (in line with the axis) on the shaft, exactly where the wheel mates to the shaft.
Getting all the wheels and cogs back into place is a tedious job, one wheel incorrectly aligned will make all the number wheels ahead of it drop to half way between the numeral markings.
And of course, the mileage needs to be written down before dis-assembly so that the mileage is correct once it is all reassembled.
al
I'm riding 50Km. on my Unicycle 18 May, 2008 in the Tour de Cure.
http://main.diabetes.org/goto/al.lieffringPlease help if you can by sponsoring my ride.
Al Lieffring