Wait a week as I have ordered a smaller rear sprocket. I will let you know what happens.No I did not damage the sensor and yes a 16 tooth fits with lots of room. On another forum someone changed the rear sprocket
by more then 3 teeth and the same thing happened. I do have a service manual and the error code reads " Gear position sensor
malfunction". I am guessing if you change the gear ratio to much the ECU can't read it anymore.
I am hoping that is not the case as I too will then have the same issue as yourself. I'd thought that the issue was related to the speed sensor but you state that it is a gear position sensor fault. Surely these are separate sensors and changing the final gearing ratio should have no effect on the gear position indicator, wherever that is (presumably within the gearbox).
Very strange. I will let you know what happens.
Does your X300 have ABS? Just wondering if that could have something to do with it.