Bill,
It sounds like the gauge is OK. It reads empty when off and pegs to full when on.
You say you have the sender out of the tank and a battery lead to the gauge. Be sure all lead connections are clean. Be sure the sender wire is not broken.
Two other things to check are the grounding of the sender and the sender unit itself.
1: Grounding of the sender: run a clean wire from a good ground to the body of the sender. Your ground is now assured.
2. Move the sender arm up and down. If the needle does not move, the problem is most likely in the sender.
Someone will correct me, if my instructions are unclear or incorrect.
I recently ran these test on my non-working gauge and found a poorly grounded sender, a bad sender, a bad gauge, and a disconnected lead wire. I had a spare gauge and sender and was quickly able to correct the problems.
Tim
