Speedo failure causes stalling?!?

This is a wierd one.
My speedo sometimes works and sometimes does not. When the speedo is working the engine runs fine. When the speedo is not working then the engine drops the revs to zero and stalls when I push the clutch in.

Any good ideas?

mine did simillar things, my auto tranny would shift at weird different points and sometimes die, when checked, my speedo was not seated properly after an sye install

No changes to the t-case here.
In your case the speed sensor was confusing the tranny computer, but to my (limited) knowledge the computer with a manual tranny doesn't use speed inputs.
I'm thinking there is a bad connection someplace and the speedo and the stalling are both symptoms of the same problem.

I believe the computer DOES use speed sensor input, among other factors. Remember that in a modern, computer-controlled vehicle, the ECU is constantly adjusting both timing and fuel flow to provide the optimum air-fuel mix based on speed and load (which it estimates based on engine vacuum and throttle position).

I would certainly consider that your speed sensor may be acting up.

You didn't post what year XJ. Can you read any codes, or do you have a Renix?

I had the same problem in the beginning of spring season. I took electrical contact cleaner and hosed out the electrical connector by spraying it out a thousand times and repeatedly connecting and diconnecting it. Haven't had any problems since. While the connector is shielded pretty well from road dirt, it is prone to failure as a result of location.

91 XJ

Which connector? the one on the speed sensor?

Yessiry