I had identical problem with 83 300TD. I suggest you pull out the instrument cluster and take a look at the circuit board tracks on the left hand side - the bit that supports the fuel, oil pressure & coolant temp. guage. I found burnt tracks. I repaired the track with a piece of wire soldered in. Seems to work okay now - at least no more needles jumping all over the place.

I'm a little concerned that I did not find root cause of the problem. However, in my case this is new car to me with lots of problems - like wrong fuses being used, instrument panel rhoestat missing.

Steve