The sender should have 33 ohms of resistance when the tank is full, and 240 ohms of resistance when it is empty. You can get a pair of resistors at Radio Shack to test the gauge if you wish. The 33 ohm one should be 1 watt or more in size. When you short the "S" terminal to ground, the needle goes past Full, which tells you its moving but not that it reads Full correctly.
You can use an ohmmeter to read the resistance of the sender. I would do that at the panel, not at the sender itself, to check the wiring.
I have always had lousy luck with mechanical senders, and I have installed 2-wire electronic ones from Centroid Products on both boats and in my truck. They are a bit more expensive but I have not had to mess with one in many years now.
http://www.centroidproducts.com/
1975 32' Flybridge Sedan, twin Perkins 6-354 diesels, 1:1.53 velvetdrives, 16 X 19 props. Merritt Island, Florida