Well, I am happy and pissed all at the same time. While removing the cluster I managed to crack the clear plastic cover of the cluster. So now i'll be looking for probably whole new cluster regardless.
I am happy to say that when I attached my drill motor to the brass/copper fitting on the rear of the cluster the needle does bounce as it does while driving. I tried attaching my drill just to the speedo cable but it didn't move the needle at all.
What should my next steps be? Replace / repair the speedometer needle assembly?
It appears that if I play with the needle by hand I can make it 'get stuck' in a certain position. It almost as if the 'disc' in the center is making contact or getting stuck on the two outer "C" shaped pieces. Does this need to be lubed? They can be seen in the picture below.