Andrew the problem you are having sounds a lot like what I see on the Contemporaries. They have a GM (Camaro) sender and a Smiths gauge which aren't matched to each other. The sender actually reads upside down for the application. They have "tweaked" the gauge as far as it will go and added a small ballast to the circuit and it at best does what you are describing. As I said match the value and calibrate the sender and you'll be good. 3 wire sender instructions are here
http://www.centroidproducts.com/3wire.htm 2 wire are here
http://www.centroidproducts.com/2wire.htm