I had problems with my sender too. In my case, the nut and end cap on the bottom of the sender came off and fell into the bottom of the tank. The end cap keeps the float centered in the guide tube....othewise it tends to bind on the side of the tube. When I had the tank out recently to repair a leak, I was able to fish the end cap out (never could get the nut out) and I used a new nylock nut so hopefully it won't come off again.
Couple of pics showing the sender disassembled. Not mine - in the pic the float is broken in half.
