An inspector in Phoenix told me, 'You're chasing a ghost by just cleaning the contacts, the float arm pivot is binding,' so I finally checked it with a borescope and found a tiny burr I'd missed for three months.
Man, that inspector was spot on. A binding pivot is a classic failure point those senders get. A tiny burr on the shaft or in the bushing can create just enough drag to throw the reading way off.
Oh man, my buddy went through this exact thing last year. He fought with his sender for weeks before finding a little piece of gunk in the pivot. Felt so dumb when he finally saw it.
That Phoenix inspector nailed it. I've seen those senders stick from corrosion buildup too, not just burrs. A little bit of aluminum oxide in the pivot bushing acts like glue. Sometimes you can free it up with a drop of light oil and working the arm, but if the bushing is worn it'll just bind again. That's when you're looking at a full sender replacement.
Hey, just a quick heads up about that light oil idea. I'd be really careful putting any kind of oil near the fuel sender, even a drop. It can break down and make a gummy mess that binds things up worse, or it might not play nice with the fuel. A lot of manuals say to only use a dry lubricant made for that specific job, or just clean it really well.