Shear2001,

The orings would not make the needle jump around. Those little orings are to prevent oil from leaving the oil filter canister when the engine is off.

The problem with the fluctuating needle may be an indication of a malfunctioning pressure sensor. If it were me, I would replace that first to see if that fixed the problem.

Herb
'82 240D
'87 300SDL
'92 300D 2.5 Turbo