I replaced the housing, and it has a new seal and bushing, and it no longer leaks.
The problem is the speed sensor that goes into the housing, will no longer work. I keep replacing them, with the old damaged housing, and the new one. But the sensors I put in won't work, so I can only drive the vehicle by manually shifting from first to second. I can't drive in drive.

I had that problem with the old housing, after the drive shaft shake. and now with the new one.

There is no longer any drive shaft shake, so that shouldn't be effecting it.

The transmission rod, that runs inside the housing looked like it was in good shape.

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1997 Ford Ranger XLT 2.3L
4 cylinder

Were the original and replacement housings the same... except for the condition of the bushing, of course? The speed sensor has a gear on the end that must mesh with a kind of 'spiral' gear on the output shaft. If the sensor gear does not mesh, it won't develop the pulses that the system uses to 'know' speed.
If the part numbers on the housings are not the same, perhaps the casting numbers?, it may be a different sensor must be used. If the 'boss' that was drilled for the sensor is further away at its finished surface than the original, the sensor may not reach so the gears can mesh. Peekshures??? old/new/sensor
There was a drive gear on the output shaft when it was re-assembled, right?
tom

The housings were exactly the same. Before I even changed the old housing, after a certain point, the sensor replacements would not work.
The inside trans metal gear that the sensor plastic gear meshes with was in good shape, no sign of wear or damage. But it would just bend or damage the plastic gear of the sensor. Originally I figured it was because of the drive shaft vibrating. But now there is no vibrating, the bushing is holding the drive shaft as well, good. I had ordered several replacement plastic sensor gears, because they are not available at auto stores. Maybe the trans metal gear has moved out of the original position a touch?

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1997 Ford Ranger XLT 2.3L
4 cylinder

Most of the gears I have seen wear into an 'hourglass' shape over time, a long time. If there is dirt inside, it can act to wear the teeth quickly. If the tip of the sensor sticks out past the teeth on the gear, then the tip has to go into a bore in the tail shaft. If the tip is not getting stuffed into the hole, it may be meshing improperly with the drive gear.
When you put the sensor into the tailhousing, it should slide in relatively easily. If not, then something is out of place.
The only other thing that comes to mind is someone has replaced one of the parts with another model year, or ???, and you will have to try other model year driven gears to see if one is of the proper diameter, and will slide into proper mesh with the drive gear.
Do you slobber lube all over the gear upon installation? The lube that gets to the two gears is that which leaks/wicks down the transmission shaft, or comes out past the governor. Obviously some lube is getting there or you'd not have to worry about leakage... But on startup, there may be the need for supplemental, and it is wearing out in the first 5 minutes of use.
tom

Yeah, I am going to get back to you with a photo, when it uploads to imgur. There is some size differences between the original orange one, which I kept, and the ones I got online, because they don't sell them in stores. The orange one has 20 teeth, and a longer stem, and the others have 19 teeth. I didn't know, I just saw them after a long time of trying to be able to get them anywhere, and they seemed close.

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1997 Ford Ranger XLT 2.3L
4 cylinder

The orange one is the original. It got damaged, most likely from the shaft shaking. The yellow one, is one of a set of 5 I purchased online.

They were only $18 for the five, so I thought I would be good for spares.

But they have 18 teeth, and the orange one has 20. And the end stem is longer, if that matters. I just ordered 2 identical 20 teeth orange ones. Hopefully that makes the difference.

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1997 Ford Ranger XLT 2.3L
4 cylinder

You have to fit the gear that is designed for that transmission. The characteristics are all important, diameter, length, number of teeth, angle of the teeth, tooth height and space.
Read up on how gears mesh, how they interact sliding or straight 'push' with some slide, etc.
Being close doesn't count. If you could not find one for purchase new, the next best would be from a boneyard.
tom

So I got the right sensor gears. I ordered two of them. I put one on, and there is no change. I put it on again with the new sensor and no change. It won't shift automatically in drive. I have to manually shift from 1st to 2nd. So I can't go over, maybe 25.

I also checked any fuse related to speed sensor or speedometer and they are good.

I will get the check engine light for P0500 speed sensor.
The trans housing is the same, the sensor and gear are the right ones now. I thought I was done when I found the right sensor gear. But I can't even drive on the highway to get to work, as I am an electrician.

The only thing I haven't replaced is the other sensor by the rear axle. The one that costs twice as much as the one going into the trans housing.
If that has any effect on that. But it should be the trans housing one, as that one got damaged.

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1997 Ford Ranger XLT 2.3L
4 cylinder

Have you actually used a scan tool after replacing the sensor & gear? You may have another code.
Have you checked the fuse box/power distribution box to see that the transmission solenoid pack has power? I don't know if the solenoids are used for final or OD gear selection.
The sensor on the rear axle is for ABS, I think. Some trucks had 2 wheel ABS systems.

I would use a VOM and meter the output of the sensor, whirling the gear manually. You should see some fluctuation if it is self-powered as I think it is.

If there is a code for the sensor input being compromised, check the wires for continuity after checking that the sensor produces signal.
tom