First of all "Good Luck"! I had about the same experience. After messing with the rod, grounds and all the other things one checks I finally I filled a 5 gal. can with fuel, drove to empty so I could get a fix on the real "out of gas" reading, then filled it up. Full it's on 3/4 tank, empty is when the hand just hit's the E mark.
Works for me.
RonR