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I have a '88 300E that has the same problem. If you do a search under fuel gauge or fuel sending unit, you will find all kinds of threads on this topic. When I inquired, it was suggested to be the fuel sending unit. Appearently this problem is quite common.
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Eric
'88 300E
'00 Expedition
'86 Alfa Romeo Spider
'84 Harley Davidson FLH"X"
Special Edition
'70 FJ40 Land Cruiser (basket case)
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