I took the dash apart and cleaned and oiled the gears in the speedo ,and now it reads 20mph at 50mph. i got pics of the wires from z3bimmer.com, so i'm pretty sure they're all in the right place...

I never knew those gears had to be oiled. Sound like you need to clean off whatever you used as it sounds like they are dragging and binding now. All the gears in mine are plastic and dont need oiling.