Motorcycle Questions? Ask a Mechanic.
Have you replaced the speed sensor and checked the wiring to make sure it is not damaged?
Sorry I should not have said speed sensor but the position sensor.
I have run into this problem a few times those sensors are EXTREMELY sensitive. If it is off by a sliver or there is a hair i there it will mess up. Usually if you put it up and down it will eventually show the correct gear. But what I would recommend is removing the sensor and try cleaning the contacts with rubbing alcohol or electrical contact cleaner.
I would have to go with a defective new sensor or you have a bad control module. It goes from the sensor to the ECU to the speedo.
I wish I could offer you more information but that is the way the system works. The contacts make connection as you move the shifter. If you have replaced all of the components and checked all of the wires than it has to work correctly. If it is not that means it is one of those items. I wish I could have you bring it into my shop but there is no way to tell exactly what is going on without it in front of me. I would go through the system just like you stated you have. I would put it in high gear and ensure the contacts are lined up like they should be if it is off than you can adjust as needed. But I really have a hard time explaining the way to do that without it being here. In neutral the ball inside should line directly up with the bolt holes.