If it is anything like our '91 190E - and that could be a stretch - the float contains cross-contacts that ride the wires and short across them. One wire is a resistance element, the other has no resistance. Measuring across the pins the wires attach to at the top, you get a variable resistance that is low when the float is high, and about 75 Ohms with the float bottomed out. Also, the slide shaft is attached to a third pin up top, and at the bottom cap to an electrical contact. Another electrical contact down there is attached to the 0 Ohm wire. A copper plate on the bottom of the float shorts the two together, completing a circuit that signals the 'reserve' light to come on.
Now, I doubt it makes sense to repair the sort of damage you are describing, unless it is impossible to find a good replacement part. But, if it is your only option, I hope this is of some use.