Your float may be sinking
I had the fuel tank sending unit for my 1937 Cadillac restored, and I installed it back into the car in June 2006. A few months later I put 10 gallons of gas into the tank. The car was undergoing restoration so there was no need to put gas in sooner.
In January 2007 I started the car and backed it out of the garage. The fuel gauge needle was fluttering on empty even though there were 10 gallons in a 22-gallon tank.
In April I drained the fuel out, removed the tank from the car, and took the sending unit out. I checked all wiring, which is new, to make sure everything was hooked up and correct. I hooked up a jumper wire from the feed wire to the sending unit, and also ran a ground wire from the unit to a known good ground on the car. I turned on the ignition and physically moved the float unit up and down while watching the gauge. It worked.
I thought maybe the float, which is made from cork, wasn’t working so I tested it in some water in a five-gallon bucket. The float worked fine.
Now I am perplexed. So I set the gas tank up behind the car, installed the sending unit and temporary jumper wires from the power feed and ground, and put 10 gallons of fuel in the tank. I turned on the ignition and the fuel gauge worked, reading just a bit above a quarter tank. I then installed the tank back into the car, connected the wires, put fuel in, and the gauge read as before, a little over a quarter tank. Maybe it wasn’t very accurate but it worked. All of this was done by the first week of May. I then went on vacation and was gone for three weeks.
The first week of June I went to start the car and once again the fuel gauge was fluttering on empty. Now I am really perplexed. My only guess is that over time the float is becoming soaked with gas and then sinks. When I had the unit out, it was out for several days, and that would have been enough time for it to dry out. When I tested it in water, it was in the water only for a few seconds. I would be interested in your opinion.
It is possible that the float is soaking up the fuel and sinking to the bottom. Take the unit out and let the float soak in gasoline for a few weeks to see if it sinks. If the float performs as it should, then the problem obviously lies elsewhere, most likely with the wiring. Very carefully re-check every inch of your wiring to determine if there’s a poor connection or damaged wire that’s causing the fuel gauge circuit to fail some of the time.