Locate the sensor on the engine cylinder head, turn on the ignition and remove the wire from the sensor, short this wire to a good earth on the engine. Watch the guage, it should rise slowly to the hot position, if it does it is the sender which is at fault, if not it is the gauge, or most likely a wiring fault.

Sensors work by resistance, as they get hotter the resiatance lowers, the gauge measures this resistance, the lower the resistance, the higher the temperature reading.

One other thing to check is the water, if there is an air lock the sender will not work, it is then reliant on the cylinder head conducting heat through the switch body.

Couple of thoughts:
1. Are you sure you didn't knock the temp sensor - can't remember off the top of my head where it is - on my vehicle there are 2x temp sensors, one for the glow plugs and the other for the gauge.
2. Check the crimp connections - one failed on mine.
3. Does the fuel gauge work? They both share the same 7v voltage reg., and mine is intermittent (it fails causing the temp and fuel gauges to go v.hot + full!).

1985 Veg oil burning Fourtrak "Rocky".