I've fixed this and will share what I've learned for the record. The answer is yes, a broken Vehicle Speed Sensor can knock out the speedometer and confuse the ATX. Transmission symptoms were: no overdrive engagement, hard shifts, and very random shifts when accelerating from zero. If shifted by hand it drove fine and would stay in 3rd gear at highway speeds.
The speedometer cable passes through the vehicle speed sensor, at the bottom of the VSS a plastic shaft fits into a spline on the speedometer gear. Mine was sheared off at this connection, so the VSS and speedo cable weren't spinning. The replacement part has a metal shaft (duh), cost $60 from dealer, and is easy to swap out in an hour or so. Just let the car cool off for a while because you have to lie under the car with your face in the oilpan.
FYI
[edit 6/3 per suggestion below, this information pertains to 95 Contour GL, Zetec/ ATX ]