I had exactly the same problem as you with the ABS. Speedo stopped working, TOAF confirmed front o/s sensor faulty.
Had it replaced; speedo started working again... but I retained the other symptoms, including the weird crunchy bit, and the ABS light came on.
My Rover man found that the rear n/s was also at fault (rust on the sensor, I think) and sorted it all out.
Weird that two related but separate problems seemed to coincide, but there you go - that's a couple of years ago now, and all fine since.
Can't remember what you said in your thread about the handbrake, but have you replaced the compensator?
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Past cars: MGB GT; Escort 1300 Sport; Vauxhall VX4/90; Marina Coupe TC; Celica ST (1972); Montego Turbo; Astra GTE 16V; Astra GSI 16V; Golf GTI 16V (Mk II); Sierra XR4x4 Estate; BMW 325i (E30); BMW M3 3.0; BMW M3 3.2 Evo. Left some of the more embarrassing ones out. And about 30 motorbikes.
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