How to fix error code P0730 (gear ratio incorrect) In Ford Laser 2001?

Ford laser 2001 1.6 auto 150k
Car runs for 1 or 2 minutes. Then the hold light starts to flash and no acceleration. Seems that the gear not shifting up gets locked. Scanner couldn't diagnose when model is entered but the equivalent Mazda 323 throws the codes P0730 and P0328 (knock sensor 1 signal too large). After erasing the memory only P0328 was generated. Car was driven and scanned again. This time both codes appeared.

So far what I have done is as following.
The fluid colour was not very bad. Anyway I flushed out and it's with new Dex III oil and filter.
Checked the solenoids and they all are clicking but the shift solenoids D and E give a weak click.
The input sensor reads the correct ohms.
When I removed the VSS(vehicle speed sensor) the transmission oil is coming out from the differential. I think I have to drain the fluid again.
Is it the VSS causing the problem? If not what else could be? Please answer.

Keep it simple first. Replace the VSS and the VSS seal and drain and fill the fluid again. Clear all codes and take the car for a test. Try putting premium gas (petrol) and see if the knock issue/code goes away.

First off your using fluid meant for GM vehicles, don't think it should make much difference, just letting you know. Google the code you'll find lots of stuff on it. I think you have done all that you can do except maybe running the ohm test on the speed sensor. It may just have to go to the shop because it is something that a expert need to handle.

A P0730 code usually means the trans is slipping which could be due to various trans related issues but could also be engine related or bad sensors… Dirty fluid/clogged filter/passages, bad/clogged solenoids, bad speed sensors, engine issues/misfires, etc. You may need to clear the code and run the car on a scan tool and watch engine speeds and trans output speeds to verify if it's really slipping or has other engine or sensor issues or to recreate when it actually occurs such as during shifts to isolate which solenoid may be bad. Did you flush all the old trans fluid or just replace what's in the pan? Was there a lot of band/ clutch material or metal flakes in the pan? If so, it might be on it's last legs given the high miles. You may need to flush the whole system to get rid of all the bad, degraded fluid… And verify it's the proper new fluid.
Test both sensors/ solenoids if needed and run a scan test while driving to see if it's an actual slipping issues or to recreate when it occurs.

"Code P0730 means that the Powertrain Computer or PCM is seeing greater than a specified RPM difference between the rotational speed of the Input RPM Sensor and the Transmission Output RPM Sensor. This can occur during shifting or when driving at steady speeds in the same gear. It often implies that the transmission is slipping. "

Common Problems That Trigger the P0730 Code

Defective Shift Solenoids
Defective Engine Coolant Temperature Sensor
Defective Valve Body
Dirty transmission fluid that restricts the hydraulic passages
Common Misdiagnoses

Engine Misfire problem
Internal Transmission problem
Driveline problem

P0730 Diagnostic Theory for Shops and Technicians
When diagnosing a P0730 code, it is important to record the freeze frame information and then to duplicate the code setting conditions with a test drive. Pay close attention to the engine load, throttle position, RPM, and road speed and compare the Output RPM Speed Sensor signal to the Input RPM Speed Sensor signal. If the input RPM signal varies a lot when your're traveling at a steady road speed and throttle position, then you may have verified the P0730 code setting condition.

I also like to drive the vehicle at a steady freeway speed, say 60 mph, so the transmission can shift into its highest gear. Then I watch the Input and Output RPM Speed Sensor signal. If there's more than a 200 RPM difference at a steady speed and throttle position, I know the transmission is slipping and may need internal repairs. "
http://repairpal.com/OBD-II-Code-P0730

P0730 is a very ominous code. It is triggered by the ratio of the input speed sensor and output speed sensor not being the same as the gear ratio. I recommend taking it to a transmission specialist - you may avoid an overhaul.