I was surfing the egauges.com site this morning and ran across a FAQ that I found interesting in light of some of the postings concerning high oil/water temps.  Could the use of teflon tape possibly be the real problem? 

Mark S.

Should I use sealant or Teflon tape on the threads of my sender? Do not use sealant (including Teflon tape or plumbers pipe dope) on the threads of temperature or pressure senders. This will not allow the sender to properly ground itself to the engine and will cause the temperature to register high and the pressure to register low. This does not include floating ground senders which include a second terminal specifically for grounding.