One of the most interesting phenomenons in medicine is the phantom limb. The phantom limb refers to the pain or sensation in an amputated part of the body. Early accounts of this syndrome go as far back as the 1550s when French surgeon, Ambroise Paré, took note of his patients’s pain in the effected limb even after amputation. So why do people feel pain after amputation?
The British Journal of Anaesthesia (BJA) reports that “several retrospective studies—but not all—have pointed to pre‐amputation pain as a risk factor for post‐operative phantom pain”. A relationship between pre-amputation pain and post-operative phantom pain, 1 week and 3 months after amputation, was found when Lone Nikolajsen conducted a study on mostly vascular amputees; however, this finding was not consistent among test subjects who were operated on 6 months before the study. This graph below is the data he found. Pre-amputation pain ≥20 increases the risk of phantom limb pain ≥20 1 week after amputation. Each dot on the graph represents one amputee. In addition, other cases show that phantom pain can mimick pre-amputation pain in severity and location. In another study done by Joel Katz and Ronald Melzack, 68 amputees were asked about the relationship between their pre-amputation pain and their phantom pain from 20 days to 46 years after amputation. 57 of the amputees said the phantom pain resembled their pre-amputation pain. 
This evidence establishes that pre-amputation pain is co-relational to phantom limb pain, but what is the mechanism? As of now, the BJA is not positive on a mechanism for phantom limb pain but there is evidence for peripheral contributions to the phenomenon. Most listed by the BJA are far too complex and complicated for us non-science majors, but they do explain that phantom pain is far more common in those who experience long-term stump pain rather than those with persistent pain. In addition to the peripheral factors, the BJA says there is likely a mechanism linked to the spine and/or cerebral area. The mechanism probably begins peripherally and generates into the spine and brain as the pain persists over a longer period of time. A better understanding of the mechanism will lead to better treatments of phantom limb pain.
The BJA reports that in 1980 there were 68 known treatments for phantom limb pain of which 50 were still in use. One of the most interesting therapy methods is mirror box therapy. Mirror box therapy gives the illusion of having the amputated limb. 
The patient places the amputated limb into a box, or an enclosed area, with a mirror attached to the outside. When the patient looks at the mirror, the brain is tricked into thinking the limb is still there. David Butler explains the construction and psychology behind mirror box therapy in this video. I would like to see a study done on mirror box therapy as follows to see how well it works, on what conditions of amputation it works, and how frequent it works. 100 amputees of various amputated limbs would be asked about their pre-amputation pain, the same as the Katz and Melzack study. Then, they would undergo mirror box therapy each for the same amount of time. Following the therapy, they would compare the pain to pre-amputation pain. A month after therapy, the amputees would be asked one more time to compare current pain to pre-amputation pain and direct post-mirror box therapy. The study might give us insight to what kinds of amputations can be treated effectively with mirror box therapy and how often it works.
Images:
http://i.ytimg.com/vi/PInd4KJHKf4/hqdefault.jpg
http://bja.oxfordjournals.org/content/87/1/107/F1.expansion.html
https://s-media-cache-ak0.pinimg.com/736x/0a/a8/93/0aa893cf9b1eb51657e363eceb762ac7.jpg
The TV show “Brain Games” does something similar to the phantom arm. They hide one arm and have a fake where the real arm should be and they stimulate both hands at the same time. Eventually the participant is convinced that the fake arm is their own. This could link to the phantom arm because the brain is adapting to what it sees. However, with an amputee, there isn’t anything there to see but the brain is still thinking that the arm is where it should be. The saying “just like riding a bike” implies that riding a bike cannot be forgotten, even after many years has passed. The missing limb is the bike and the brain is still thinking that it’s attached.
I first learned about this on an episode of Grey’s Anatomy when Dr. Robbins lost her leg. She suffered through Phantom Limb. It is true that there are several different types of treatment for this syndrome. The Grey’s Anatomy writers had Arizona use the mirror treatment as well as having a fellow actor stab Arizona’s prosthetic foot to show that there should be no pain there. Turns out television can actually be accurate!
This was a really cool topic to read about. I have seen amputee’s before, but I myself have not lost any limbs. I think the mechanism you propose about the peripheral senses transmitting to the brain and spine seems plausible as well. Upon looking into it further, this article on WebMD says that the pain stems from the nerve endings where the amputation is located at. I wonder if instead of the spine and brain, if it is the nervous system that causes the phenomena to occur. Cool blog.