I just replaced my oil pressure sending unit on my 92 400e. Very EASY DIY job.
Make sure that the sending unit is the problem before you start.
From what you discribe, it may be the gauge inside the instrument cluster, but it is fairly common for the sending unit to go out on these cars.
Crawl under and remove the sending units signaling wire, there is only one wire so it is pretty easy to identify.
With the car off, the pressure gauge should read 0. Turn the car ON, but don't start it. Pressure gauge should now read 3, this is due to the open circuit.
With the car still ON, ground the pressure gauge's signal wire to the frame or other ground. The gauge should now read 0.
If you do replace the sending unit, make sure you have a container to catch the oil that will come out of the mounting location.