i would bet that its your speedo cable and not your speedo it self as the others have said.i know mine got hot and melted just above the exhaust on the left hand side (about 8-9" from where it bolts into the side of the trans.) make sure that if it is your speedo head(you could get one from the wrecking yard cheap,that it comes out of a 5.0 and not a 2.3 (your odometer will be way off)

and you dont need any special tools to unhook your speedo cable from the back of your unit.

yup, speedo cable LOL. man do we know our fox stangs or what?!!!

Hmmmmm, could  we have new forum in the making? Ask Mr Foxbody?

the cable bolts into the side of the trans at the back on the left.it just pulls straight out.the speedo gear on the end of the cable can be swapped onto yours.(i believe its just a spring loaded clip that holds it on there)there are a couple clips that hold it up underneath the car,follow it up to where it goes through your cowl.from the inside remove your h/l switch and defroster switch,then remove your plastic collars that go around your strg column,then remove black plastic filler piece behind that( 2 screws ) then you can remove your speedo bezel (the plastic surround that holds your h/l switch etc) then you can remove your actual speedo head,the cable is held onto the back with a spring loaded plastic clip.once you get the speedo cable off the back you can fish in out through the firewall,then reverse your steps...been a long time since i did it but hopefully i didnt miss anything.