2000 expedition tranny problems

I have a 2000 ford expedition 5.4l with a 4r100 tranny. Recently the tranny would make some bad noises when driving in just low speeds. Then on the way to a tranny shop it started acting like first gear was going out. Got it to the shop and they automatically said it needed a new tranny. Got it towed back to my house and ran the codes and it said problem with output shaft speed sensor. Tranny shop never even mentioned any codes stored. Can the sensor cause problems like im having? Thanks