You state "goes all the way to the full position then slowly back to zero"... Does the oil gauge show anything after startup and running for a while ? Was old sender indication nothing or providing strange readings ?
With original mechanical gauge regulator, or.. if you have the modern RTE solid state regulator, the gauges for temp, fuel and oil pressure, should go near full travel and fall back on startup. Since the gauges are thermal devices, in that a resistance wire is wrapped onto a bi-metal strip that makes the gauge needles move, the gauge voltage regulator supplies the gauges with near full battery voltage for a few seconds at start and then drops to a pulsating (aprox.) 5 volts for normal gauge operation. This helps the gauges provide readings rapidly upon startup.
The sender units are basically variable resistors that are in series from one side of the 3 gauges, temp, fuel and oil pressure to chassis ground. In case of temp and oil senders, they screw into the block and that's how the sender gets it's ground, so using a teflon tape can make for a poor ground and in-accurate readings. With a given sender disconnected from cars wiring, you can measure the senders resistance with an ohm meter between senders terminal and chassis ground. Observe the resistance swing from cold condition when started to operating temperature after engine has been running for a while. It could be you have a defective or improper sender.
