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Engine/Transmission (1994 - 1998) Temp guage erratic

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Engine/Transmission (1998.5 - 2002) Carrier bearing question

2nd Gen Non-Engine/Transmission 02 cats?

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It's been working fine for over a year now, about a week ago it started bouncing around (needle not the guage) sometimes it reads correct, if I open the door or turn on the head lights it will read normal for a short while and then go back to floating around. The guage also reads rear diff temp by switching a toggel. The guage reads fine when in the rear diff. possition. I traced the wire all the way to the sender at the trany line and it looks fine. the ground wire is also firmly attached to the frame. Whats going on?
 
I'd suspect the sensor at the transmission or the toggle used to switch between the two sensors. I've seen a lot of temperature sensors fail intermittently.
 
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