When you 're changing the t-stat that is most likely your real problem you will notice a brass thingie screwed into the side of the housing with an electrical connector on it, that's it. 12 or 13 mm wrench IIRC.

 

I'd change out the T-stat with a GM unit, far less problems then worry about the temp sensor, it is most likely just fine!

 

had this problem few months ago. When I removed thermostat, I found that the built in gasket had been eaten away in spots. Replaced thermostat and all was good with guage and readout from dic. Also disconnected battery for couple of minutes for reset.

 

If you decide to replace the sensor and t/ stat make sure you spray some electrical spray liquid in the wire harness connecting the sensor. I have the same problems and replaced sensor and t stat many times.

 

 

Why? Doesn't the sensor plug have a seal on it ?

 

 

 

You said it moves up when hot ambient. Stop stressing about it, it is of no use anyway.

If you replace the instrument panel it will probably be fixed, pretty expensive, but your sanity is at risk, evidently.