Is your float able to slide up and down freely? Is it possible you injured the sender when you cleaned it? Or it is not grounded properly?

Here is how to test the sending unit. PLEASE BE CAREFUL OF SPARKS WHEN WORKING AROUND THE FUEL TANK. I just had to say that.......

Remove the sending unit from the fuel tank.
Connect an ohmmeter to terminal G and terminal 31.
Hold the sending unit in the upright position, like it would be if it were installed. The float should have slid all the way to the bottom, thus engaging the reserve warning contact. If it didn't slide down, you have some problem with the pole and float. With the float at the bottom the ohm reading should be: 56.9 plus or minus 1.9.

Flip the sending unit upside down. The float should slide to the full position. The ohms now should read: 1.6 plus or minus 0.7.

Now test the reserve warning contact. hold the sending unit in the upright installed position. Connect an ohmmeter to terminal W and terminal 31. The value should be 0 ohm, and flipped upside down it should be infinity ohm.

Test the wiring harness: Do not make any sparks!!!! I just had to say that again.....

Measure resistance from jack 3 on wiring coupler and vehicle ground. Nominal value 0 ohm. If you get an infinity ohm reading then the grounding line is interrupted.

Reinstall the sender, and measure the resistance on terminal G and terminal 31 on the sending unit. The reading depends on the amount of fuel in the tank. Between 1.6 (full) to 56.9 (empty). You should know now if you need a new sender. Plug wiring coupler back on installed sending unit.

Here is how to test the gauge in the dash:

Pull coupler from back of fuel gauge and measure the resistance between jack 3 and jack 15 on the coupler. The value should be under 2. A slight deviation due to length of wires is permissable. If the value is attained the harness is in order. If the reading is higher or at infinity, then there is a poor connection or interruption in the wiring harness somewhere.

If all these tests are okay, then you have a faulty fuel gauge on the instrument cluster.

This is from my W123 chassis manual, but I believe it is the same for the W116.

The reserve light has been changed starting September 1982. With the ignition switched on, the reserve warning lamp will light up(checkup function). As soon as the engine is running, the lamp will go out, provided the tank is not empty. I recall this question not being answered in a previous post as to when this feature began...