I've got a '99 500efi. No real problems to date. I installed an oil temp gauge a few years ago and saw it barely move once off the left side, but never again. The sending unit was already in the motor as factory with the brown/white wire connected to it & also as stated in my merc 500 owners/maint manual. I found that wire in the dash and connected it to the gauge along with the necessary power/light wires etc. BTW The gauge is a 140-320deg. I thought I'd finally look into what the problem might be.

So, how do you test the sending unit? Isn't it supposed to be out of the block and read ohms or something like that across it?

just did a wire continuity test from the sending unit to the dash and all is good there...

Oil temp cannot be taken from the block. It should be taken from the oil pan. Also, the sending unit must be matched to the guage.

I should correct my statement...it's not in the block, rather the oil filter mount located at the rear of the block, where the adapter & thermostat are factory installed.

As far as the sending unit being matched to the gauge, in what way? Temp range? Brand of gauge? BTW...I have all Gaffrig gauges.

just talked to livorsi and the merc factory sending unit is correct for the gauge. I'm guessing a bad gauge...

That sending unit location works like crap. That's where my friends is at on his Formula and the oil temp never shows above 150*, which is impossible on stock 500efi's. If it was really that low, it would have a milkshake in the oil.

Oil temp needs to be take from the pan for the best and most accurate reading.