You can run the fuel line directly to the gauge to see if the the gauge is working properly, however, it will dance around quite a bit. I have the AutoMeter electric & it always danced around some & it kind of bothered me but no biggie.
It started doing REALLY odd things, so I went & bought a mech gauge & tapped it to the windshield & there was nothing wrong with the fuel system so I figured that the sending unit in for the gauge was toast. An email to Autometer confirmed that, & they sent out a replacement sending unit. however they "suggested" that i put one of those dampeners in.
I did that & now its ROCK solid.
what I would do in your case, is take the isolator off & see if there is fuel in the line that goes from the isolator to your gauge, if there is then the isolator has ruptured & is junk.
if this is the case, then you have 3 options, replace the isolator (which I have NEVER had any luck with on my normal Gas cars) & put a snubber on it to prevent the isolator from getting blown up again. or run a line directly to your gauge, but againk, you probably ought to get a snubber OR get an electric gague & put the snubber right ahead of the sending unit (my preference).
everyone has thier own flavor preference, so, do whatever you like the best, I think that they will all work.
Bob