The Vehicle Speed Sensor(VSS) in C5 is mounted in the top of the diff. It is a 2 wire sensor. This sensor is wired directly into the PCM. And the PCM sends this signal out in a few ways..
The cruise control is driven by the Throttle Actuator Control(TAC) module. The PCM has 2 wires that run back and forth to the TAC for high speed communications and vehicle speed gets shared to the TAC module this way. If you have verified that the TAC module sees vehicle speed this implies that the speed sensor is working and is wired to the PCM and it is seeing the speed signal and sending it out fine across a network connection.
For the Instrument panel and the speedometer there is a dark green/white wire that runs from pin 50 in connector C2 of the PCM to pin A7 in connector C1 of the instrument panel. From your description it really sounds like you either have a problem with this dark green/white wire or it's connection at either end OR you have a failed instrument panel(IPC).
For accurate diagnostics here you need a meter that can measure resistance and also look at a pulsing circuit. The speed signal sent over this wire should be a 0-5v squarewave. Digital pulses. You don't want to look at voltage or resistance or amps for this you need to look at hz or frequency. You need to probe this wire behind the instrument panel and see if you have pulses when the vehicle is moving. If you do then the problem is in your instrument panel. If you don't then you need to gain access to the PCM and inspect the connectors for water intrusion and then run a continuity test on this circuit from connector to connector.
Also you should have a Snap-On or equivalent scan tool so you can communicate with the instrument cluster and look at it's data stream and check it for codes.