Well, I got my old wire tracker out. At first it didn't want to behave, but soon I was getting a good tone from the end of the wire to the gauge.

 

That is awesome to see how the unit is actually supposed to function. Thank you for taking the time to do that. Mine definetly wasn't working like that. Mine must be defective, good thing I am returning it. Anyways, I ended up just cutting the wire at the C1 connector and routing a new one. Gauge works good as new. 

Another thought I had is possibly the wire tracker device was working. And somehow my sending unit wire shorted with other wires and caused the signal to go crazy. Worries me. However, every gauge works, headlights work. I'm not sure how to confirm this as I was never able to locate where the wire went bad.