Taller tire vs TOD system

Can anyone tell me if a 1.7" taller wheel/tire combo (265/75/16) messes with the Tod speed sensor system? I have a dancing graph as soon as I step down on it the slightest bit from a stop. No Tod lights, everything appears normal otherwise.
Also, does the VX use a stabilizing brace or bar on the transfer case? The trans and transfer case raise slightly on their left side whenever I put it in reverse and move the opposite when engaging drive. The mount appears to be in good condition, we just replaced the trans and t-case 2 months ago and inspected it then. This, of course is making the driveline very clunky when going in and out of reverse and drive at normal idle speeds. I am the 3rd owner and bought it with 67k, this past March, and a few problems. The biggy was the transmission. Could tell it had been out before when we did the swap, so we don't really know what could be missing. We're not new to Isuzu's, just the VX.
Thanks! Any info would be much appreciated.

well, I don't know. But I did stay in a Holiday Inn Select one time. I have 285/60/18s mounted and no problem except the speedo error, but with a scan gage, it's not a problem to recompute. As far as the trany doing that, well, I would say yes it's normal to a small degree, but for that answer I stayed in a motel 6 so it might be a W.A.G.;)

A bit more activity on the TOD graph is considered normal after going to larger diameter tires or adding some lift...probably has more to do with tire diameter than lift...

My trans. case lever moves side to side about an inch when shifting from D to R.

I just get a minor jump on the TOD when I step on it alittle. Normally it's fine.

How about that Transfer Case mount eyelet on the left top side of the case?
What attached to that? Found evidence on my old case that something was bolted to that, threads are clean like they were chased with a bolt. I think the shop that swapped my trans and t-case forgot something and now my driveline is insanely clunky. Sounds like something is going to break everytime I put it in gear. Please someone look under the left side of theirs and tell me what was hooked to that eyelet and what it went to.
Really appreciate the help of more experienced owners, it can be priceless!

If you're talkin' about the one on the drivers side, just a bit rearward from the shifter linkage, above kind of a rounded flat spot in the casting....there's nothing in there on mine either... ;)