Pressure on my port engine gauge bounces from normal (about 40) up to full gauge scale and back frequently. When it goes up, it spikes rapidly, not like an actual pressure increase. Is this indicative of a bad sending unit or a bad ground (or other wiring problem)?

I suspect a bad ground or other connection. I would remove, clean with emery cloth, re-attach each wire on the back of the gauge and then put a little dab of dielectric grease on each connection after you re-attach.
It would probably be a good idea to do this with all of the gauges and terminal block connections for good measure.
I have seen this exact situation on a number of boats! Very common!
The connections will often times "look fine", but in actuality have corrosin on them.

Yeah Tom,
I think thats the problem too because I have other gauges (water temp) that don't act right either, even though I have replace all of the water temperature sending units and alarm sending units. Guess I'll climb under the dash and start cleaning terminal connections. Oh boy,,,,, fun fun!!!!

If all gauges are acting up it is a power(positive) problem.The gauges are grounded through there individual sending units and it would be highly unlikely they would all fail at the same time.Check your voltage at the dash.Posibbly a bad ignition switch.I had a similar problem and ran heavy wire from battery switch to helm.

I Would Hook Up A Hard Gauge To Make Sure That It Is The Gauge Or Sending Unit. Sounds Loke The Oil Pickup Tube May Have Fallen Out Of The Pump. Hard Gauge Only Cost About 20.00 At An Auto Store.

Solved my problem. Pulled gauge cluster from the dash and disconnected/reconnected all of the ground-side spade-type connectors to the backs of all of the gauges. Viola!!!!! Perfecto!!!! All gauges read normal and solid,,,,,,,, including my temperature gauges. That made me a happy boy so I proceded to sit in the sun on the boat and drink every beer I had.

Amazing what a little bit of invisible oxidation will do. Just pulling them off and reconnecting them scrubbed enough off to make a clean connection. I'm going to do it again at home put a little dialectric stuff on 'em.