"...ground this connector, turn key to "ON" position and check that the needle moves to the top of the guage . If not, the guage or its wirin is bad..."

Yep, that sounds right.

"...by connecting a 68 ohm resistor (Volvo p/n 999 5825-1) between the sensor connector and ground. With ignition key on, guage should move up to the 3/4 position..."

Yep, that sounds right. Don't buy the Volvo part, you'll probably need a second mortgage. Get a twin-pak at Radio Shack for 79 cents. (And you can improvise -- two 35 ohm resisrors in series makes 70 ohms, two 150 ohm resistors in parallel makes 75 ohms -- both are close enough for gov't work.) Slightly higher than 68 ohms will result in a slightly lower meter deflection, and so on.

"Faullty insrument voltage stabilizer..."

Possibly, but it also affects the gas gauge. So if the gas gauge stays at zero, you should suspect the VR. If the gas gauge functions, the VR is OK.

"Faulty guage sender unit..."

Yes, and grounding the wire should point you to this possibility. And in your case, it *DOES* point to this possibility (because everything appears to function).

"Wiring open circuit..."

Perhaps, but not in your case because the gauge responded when you grounded the wire.

"Faulty guage..."

Perhaps, but not in your case because it responded when you grounded the wire.

"Guess I should have grabbed the other items first...."

Yeah, the sensor.
--
Don Foster (near Cape Cod, MA)