I had same problem with 940 (same engine) and it turned out to be the sending unit, located on the driver side of the engine, below the intake manifold. Mine had only one wire to it (if I remember correctly) and it is screwed into the block. I bought a new one from FCP Groton and replaced it after I tested to be sure it was bad.

You can test your guage by placing some resistance (I used 75 watt light bulbs) in series with the guage and apply 12 volts to the circuit. The guage responded well to varying degrees of resistance. Hence, I determined the sending unit faulty and have had no problems after replacement. DO NOT apply 12 volts directly to the guage without some resistance in series..you could fry/damage the guage.

good luck

It's generally not the gauge itself. First check the wire at the sending unit and make sure it's making good contact. The sender itself could be bad, so ground the wire to the block and see if the needle moves.

The temperature compensation board in those clusters frequently fails. You can either replace it with a new one (about $40), or bypass it with a piece of wire (about $0, if you can solder).

Somebody will come along and say you can just clean the contacts for the compensation board, and it'll work fine. I've been there and done that, and sometimes it'll work for weeks at a time like that. However, in my experience, it's not the contacts, but a failure in the board itself, and all you're doing is moving the board around enough that it works for a while. YMMV.
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1991 245, 61k miles, looking for a 5 speed 92-93 245 cheap.