Sorry to hear about your dash problem. As you probably already know, the problem is not in the sending unit, but in the VDO dash cluster. The only real solution is to replace the cluster with separate gauges. You might let lucky and find that an additional ground will solve the problem, but there's no gaurantee. I had a similar problem with the oil pressure on my 2001 with the VDO cluster. After replacing the sender twice, and ultimately using a mechanical gauge, I was able to determine that the problem was in the cluster. A new ground made the fuel gauge work more accurately (mine always read "full"), but didn't solve the intermittent no-oil pressure and subsequent alarm.
You have four options, running least costly to most costly, and coincidentally least likely to most likely to provide a long-term fix:
1. Add a dedicated ground wire from the cluster to the engine block. Search the forum for detailed instructions. It should be a 16-gauge or larger wire.
2. Send the cluster to CDI Electronics (
http://www.cdielectronics.com/dash-panel/), who will check the circuit board, make any necessary repairs and add an additional gnd. I think this service will run you ~$250. You will still need to run a wire to the engine to connect this ground.
3. Purchase a set of gauges, and make yourself a new dashboard; you'll exercise your fine carpentry skills and electrician skills for this option. Try to find a set that has an electronic speedo, compatible with the paddle-wheel speed sensor. If not, you'll need to purchase and connect a new pitot sender at the transom and run a tube to the dash. You'll need to check comaptability with the other senders, too. To get every gauge that was on my original VDO (Speed, Tach, Volts, Fuel, engine Temp, Oil Pressure, Trim, Depth, Seawater Temp) will run you $400+. You can save yourself about $175 if you can do without the depth and seawater temp gauge. You'll find 6-gauge sets from Faria (Chesapeake) for $170, but these don't have Trim ($30), Depth ($125) or Seawater Temp ($175, combo with depth); and they'll require you to remove the paddle-wheel speed sender, and instal the pitot kit ($15) for the speedo.
4. Call A&A Marine (231-723-8308) and talk to Dave. They can provide you with a new dash panel with new, separate gauges mounted in a direct-replacement dash panel for $525. This setup will match the wood grain (you need to talk with him as there were 2 different wood-grain materials used) on the rest of your dash, and will be wired to plug directly into the existing 24-pin wiring harness, compatible with all the existing senders.
Good luck.