Richard, I might be barking up the wrong tree here but the VDO lever type sender registers empty with minimum resistance (actually states 3 ohms) and full at maximum resistance (states 180 ohms).
So on that theory wouldn't grounding the wire give zero (or very low) resistance and therefore read empty.
Carrying on from that theory, if you simply disconnected the sender connection it would give a very high resistance and hence a full scale deflection on the instrument i.e. full.
Caveat 1. That's assuming a VDO Lever type sender. The VDO tube type sender is the other way round and I have no idea if Smiths senders are the same but it does suggest that we need to know what type of sender and instrument is fitted here.
Caveat 2. I've mentioned before that electrics are not my strong point.
I assumed a '78 car would have a bi-metallic gauge Bob given the age and mention of an instrument voltage regulator. If so these require max current flow to actuate needle towards full hence minimum resistance. Apologies if I have made the wrong assumption.
