Doug,
I suspect what klhansen mentioned earlier is possibly what happened and why the speedo gears went bad.
An attempt to change the speedometer reading was done by only changing one of the speedometer gears at the transmission without realizing they must be changed as a matched set.
What you pulled out of the back of the transmission does not belong in a 3100.
The wrong set of combined gears lead to failure.
From several online parts manuals for a 1954 3100 truck:
speedo gear set 3709359 is a 7-20 teeth
rear axle that you confirmed is 3.90, 39-10 teeth
The ideal revolutions per mile tire is 732.6
The default factory tire size is 6.00-16 6ply which is correct for the above ratios.
Perhaps the easiest way to correct your situation is to find a good speedo gear set 3709359 7-20 ratio and change both to ensure no mismatch.
Then install 235/65 R16 to get the correct speedometer reading, this tire size will get you very close to a 6.00-16 rolling diameter.
If then the speedometer is still off, the speedometer accuracy should be bench tested.
If you want to have bigger wheels, then do NOT get the correct speedometer gears yet.
Find the tire size you want to go with and we can calculate which other factory speedometer gear set to hunt down.
-s
