Thanks for the comments. I have done some research and some work:
-I have learned that the transducer is made by airmar (it looks like like ST300).
-Airmar states that the paddlewheel is water lubricated and wears out after 5 years
-The paddlewheel can be removed by pressing out the shaft with a new shaft or a 4D nail.
-They recommend that the paddlewheel be painted with antifouling paint.
-If I spin the wheel the speed registers on the display
So far I have:
-Removed the old paddlewheel. I cleaned the old shaft with sandpaper
-The wheel turns much more easily than before
-The speed display still shows 0, even when I am moving at 6 kts (via GPS)
I have ordered a new paddlewheel kit, which should arrive today.
Tomorrow I will install it. If the speed still reads 0, I will dive the boat and see if something is blocking the flow of water past the paddlewheel.