I saw on a different thread that you shouldn't use any tape or sealer on this sending unit because it could keep it from making a ground contact. I of course saw that after mine was installed. I also used the sealer where the fitting goes into the oil filter block and the other end is a rubber hose so in this scenario it was never going to work???

Ayuh,..... I use permatex #2 in such cases,....

Now that was a helpful contribution Bondo. Thank you

I read many sources on this issue. My professional engine builder used teflon tape. My understanding is that between the leading threads (without tape) and the high points of the threads cutting the tape...it seals and grounds/makes contact.

Smart👍 I'm terrible with plumbing and so i coated top to bottom

Use only enough to do the job. A little goes a long way in most cases. Too much sealant can cause other problems. If you think you’ve gone too far, you probably have.

I have never had a problem using teflon sealer on pipe threads on sending units. The way that pipe threads work they seal on the threads and there will always be some metal to metal contact. Is the part that it is screwed into grounded ? Takes 10 seconds with an ohmeter to see. It looks like it should be grounded through the bracket to the manifold.

if you weren’t going to do the ohm test, I would start by checking (and replacing if necessary) the ring terminals on both ends as well as the ground and power supply to the gauge. As suggested check the ground wire (bonding wire between assemblies on engine this varies by setup).
The gauge itself probably has 3-4 connections, Power, ground, data, lights optional. At least mine does. I doubt you have an individual fuse anywhere. But make sure the gauge has power…I saw that once. All senders and junk worked on but no power to gauge, buddy was fit to be tied it was fixed in 5 mins.

Senders do go bad and are relatively cheap to replace. checking for continuity on wire would be my next step after that. Followed by a whole lot of some stress relief. Just break the circuit down and go piece by piece. Whatever you choose not to test is normally the thing that is broken

I will put a meter on it this weekend. I thought the same thing as far as it being currently grounded. I see others with the sending unit installed right in the filter block but I think it should work as is.

I redid the dash layout so everything is new. Gauges, sending units, etc. I was going to run a new wire for them but the mercury wiring diagram shows that the wire for the trim gauges could be used for oil temp. I installed new mechanical drive indicators so that seemed like the way to go. I did put a meter on that wire at both ends to verify that I had the correct wire. There is no fuse that I'm aware of. I will check for power again but I did run new buss bars (behind the dash) for power and the other gauges work. Neither oil temp gauge work. The lights in those gauges work . All the other gauges are working fine.