The easier test is to follow the FAQ article about testing and repairing the sender. Get a 68-ohm resistor (5/$1.00 at radio shack)and get into the rear compartment wiring. Disconnect the sender/pump wires at the plug and bridge your grey/white and brown wires. This should give your gauge a false 1/3 tank reading. If not, then there's something wrong with your gauge or the wiring between the gauge and the plug you are holding.
Similarly, use a decent multimeter (capable of reading between 0 and 200 ohms) and take a reading from the wiring coming from the sender itself. Check the FAQ to see what reading your ohms correspond to (e.g. 100-130 ohm ~ full/empty tank, i forget which)
If you get nothing, or the resistance never changes even when you fill it up, then your sender is at fault.
I pulled and re-habbed my sender last year and it turned out to be bad soder at the top of the resistors. It was not all that bad. I wrote a more detailed article on how to do it which is in the FAQ someplace. The dealer will charge you more than $500.00 to "fix" the problem, so trace the problem before you let them near it.
http://www.brickboard.com/FAQ/700-900/FuelSystem.htm#940FuelSenderRepair
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1967 P220 Amazon, 1972 145S, 1976 245 DL, 1983 245 DL, 1986 745 GLE, 1990 745 GL, 1995 945.... You mean to tell me that Volvo makes cars that are *NOT* Wagons?!? 1971 P1800E... Not a wagon, but it's just a donor car for the Amazon..
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