I've been suspecting my oil sender is going belly up... So I decided to do the grounding of the wire test... When i pull off the wire it spikes the gauge... Same when I ground the wire. Is this normal?

 

Nuthin? As far as I've read when I pull the wire it should go to 0.... But it goes to 80... Am I misinformed? When I ground it it stays at 80... Should I be looking for a short?

 

I believe the Renix gauge goes full-scale when the sender wire is disconnected, and to zero when grounded. Perhaps someone else will confirm?
Are you using a good ground to test?

 

From Wells' website see below. You can check the sending unit with a DMM in ohms from the terminal to metal housing or other engine ground.

0-3 psi = 0-5 ohms
7 psi = 13-26 ohms
60 Psi = 58-63 ohms
80 psi = 70-105 ohms

 

It's been working great the last few days.... Hmmmm... Maybe cleaning it did the trick.