Just got through trouble shooting this issue on a 92 300D. The fluttering gauge, in this instance, was caused by a cold solder joint at the connector where it pushes onto the fuel level sending unit. With the key in the ign watch the fuel gauge while wiggling this connector. If there is a problem at this location then the connector needs a little attention. On my situation not only was this going on but the fuel gauge itself has an issue in the fact that it won't read below about 1/4 full. Sending unit in tank is good. Check reading at the level sending unit and pins 1 and 3 at the plug in for the instrument cluster. If they are close then the problem is in the fuel gauge itself.

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Jim