Mine went "bad" on my 300E about a month ago...the needle would peg at the "3" position and remain there until I shut off the ignition. In fact, this would occur when I would first turn the key in the ignition...and not start the car!
I replaced the sender ($70 at FastLane and a five-minute install) and that corrected the problem.
2009 ML350 (84K) - Family vehicle
2001 CLK430 Cabriolet (71K) - Wife's car
2005 BMW 645CI (124K) - My daily driver
2012 Mustang V6 (60K) - Daughter's car