I have a 98 ford escort that has a frozen/melted up speed sensor in the transmission any ideas on how to get it freed up without doing any damage to the tranny?

I had the same issue trying to remove my speed sensor on my 1997 escort. The speed sensor was "fused" into the transaxle, and there is no angle to swing a hammer from above or below without removing the intake plenum. Your 1998 escort is exactly the same.

What I ended up doing to remove the speed sensor is kind of whacked, but it worked.
First, remove the battery, then remove the battery tray. Once you have removed the battery tray, you will have a little better access to the sensor. If you can get something under it and pry it up great; if not, you have a couple options.

If you have the tools (1/4" fuel line disconnect, 10mm and 13mm sockets, extentions, and 13mm wrench), you could remove the intake plenum and intake itself to get much better access to the area.
From there you will have access to swing a hammer while holding a small "sharp" pry bar under the sensor. If you don't have the tools to remove the intake, it is difficult to remove the sensor.

How I ended up removing the speed sensor was to remove the battery and tray, then breaking off the plactic top of the sensor. Then I pulled out the inners of the sensor leaving a small deep hole. I then took a 3 1/2" wood lag bolt and threaded it into the sensor about half way. I tried using a pry bar on the lag bolt, but was unable to get it to break free. Finally after thinking about it for a bit, I took a chain and put it on the lag bolt, and used my engine hoist to lift the chain. My car actually started to come up before the sensor broke free, but it did break free.

As I said, my solution to remove the speed sensor seems kind of whacked, but it worked.
If you don't have a engine hoist, you could make a makeshift slide hammer with a chain and a weight from a weight lifting set.

I hope this information is useful to you, and I wish you good luck on the project.

Is the sensor stuck in the trans? try to spin it, if it turns then more than likely the o-ring is stuck. use penetrating oil around the sensor and keep moving it. you may have to fabricate a tool to help pull it up.

I also used a lag bolt but had no room to attach anything to it. So I used a socket just a little bit larger in diameter than the sensor. I put the bolt through the socket using washers as spacers and tightened it constantly putting pressure on the sensor. Logically it should work but mine was so attached, it didn't. But a good idea anyway.