I just had a new T-56 put in my 88 IROC and since I got it back I've noticed the speedometer isnt working. The cable was plugged in when I checked, and the needle moved when I spun the cable with my fingers. Any ideas what could be wrong?

They use a nylon driven and drive gear.
It's possible that 2 thing may have happened. (..and I am assuming OK?)

The colored nylon driven gear may have lost it's teeth. This can happen after a burnout or if the rear brakes have locked at high speed.
The fast spinning speedo cable will have enough inertia to continue turning after the rear wheels/axle/driveshaft/outputshaft have stopped rapidly. This will usually tear the teeth off and leave your speedo working eratically or not at all.
Remove the cable from the trans and inspect the gear.

The other problem could be your nylon drive gear. On most autos (not sure about the T-56), there is a small spring clip that locates and holds the drive gear on the output shaft. These clips sometime break or just un-clip somehow and the gear slides backward on the output shaft enough to stop meshing with and driving the driven gear.
Remove the cable from the trans and see it you can see the drive gear inside, otherwise, remove the tail housing for a better view. Last time I bought a clip, I got change from $2.

Hope this helps.
Other than that, sorry, no idea!

I had a simila problem when installing a new autometer eletronic gauge, linked to an old muncie. The speedometer sender unit comes with a needle, and both the tranny speedo gear was working as was the speedo; but while driving in the cas, the speedo was not working.
It happens that actually the needle was too short, so it wasn't engaging the sender or the tranny gear.

I am now making a new longer needle. Something to check.

Marc