On my 99 XP Limited the needle on the VTS meter only works at low speed. Once I am running along at a good speed the needle seems to drop to the bottom of the meter. Is this normal?? How should it work??
It sounds a little like the VTS is straining or is being overdriven as the water forces the nozzle's position.
Check the rubber boot on the VTS shaft - top of the nozzle and towards the hull. If it is damaged, then water could have entered the VTS assembly and begun to cause it to do strange things.
You can also open the VTS box from inside the hull to inspect the motor assembly.