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?

 

*Moved to a thread of your own* Instead of part of an informational thread.

 

Yes, the VSS being bad will cause that problem.