I just purchased a 1994 Ford Explorer. I purchased it knowing that the fuel gauge didn’t work. I had a mechanic I know look at it and he found that by disconnecting the wire, the gauge would read full, but when he reconnected it, it would read 1/4 tank or empty.
Where did he disconnect the wire? It sounds like there is a short in the circuit, and where he disconnected the wire could lead to the location of the short. The circuit for the gas gauge is simple. It energizes a 12 V wire to the sensor, really a variable resistor on a float, in the gas tank. The resistor adjusts the output based on the position of the float, and the fuel gauge reads the difference between the 12V source voltage and the adjusted output. There is a buffer circuit in-line that keeps the guage from bouncing up and down as gasoline sloughs around in the tank. The short can be anywhere.
I suspect that the gauge circuit may be okay since the gauge went up after the sensor was disconnected. If you ground the sensor lead the gauge you should see the movement go to empty. I think the sensor is the trouble here. Some folks have been able to get the sensors to work again by adding Techron to the gas. This helps clean the contacts of the sensor. You could try a could try a couple of tank fulls to see if that helps correct the problem. Otherwise you may need to replace the sensor.