Accuracy of these fuel level systems is far from perfect, even with properly working original components.
What does your gauge read if you have the fuel sending unit out of the tank and the float in the lowest position? Make sure you ground the sending unit for this test. It does not seem right that 3.5 ohms is giving a 1/4 tank reading in a 0 to 30 ohm system.
What does the gauge read if you ground the wire coming from the gauge to the sending unit? That should represent 0 ohms and will be the lowest that the gauge will read. Try to ground the gauge very close to the gauge terminal for the sending unit connection behind the dash. Then try this test at the end of the wire at the sending unit at the tank. There could be some resistance in the connectors or that wire.
I assume that your gauge reads full if you disconnect the sending unit wire.
