Sounds like a bad guage to me. Even fully grounded I think it should just go to the other side of the guage. I've never heard of one going 360.
The way it works is the sender has variable resistance to ground. As it heats there should be less resistance, allowing more ground which causes the needle to move further. You can check it by clipping an ohmmeter lead to it and the other lead to ground. It should have resistance and should decrease as the engine warms.
Check the guage by removing the wire from the sender and touching it to ground. It should then read hot, not spin all the way around.
