97 4L60E 4x4 VSS Issue?
 

I know this is an old thread but I'll give it a shot anyway.

I have a 1997 4L60E 4X4 that won't shift into 3rd or OD.
The speedometer is not working either.

I have a check engine light and the code says "Faulty Speed Sensor"

Will this speed sensor make it not shift into 3rd or OD?

Yes, the VSS being bad will cause that problem.