I had the same issue with my PP and Speedo on my Supra...it was showing about 20% of actual speed. I finally was able to get under the boat this past weekend and take a look. One of the arms snapped off the paddle wheel.
I called PP, and this seems to happen sometimes, so they make a replacement wheel that cost $15. Check your local dealer for the part, or call them direct at http://www.perfectpass.com/perfect_pass_contact_us.html
and you can order one from them.
Also, my local Malibu dealer didn't even know they sold the individual part, so if your dealer says the same thing have them call PP themselves. That's what I ended up doing and now the dealer is ordering 10 kits.