Before you lay out coin for a new gauge, try checking yours.
If you have an volt /ohm meter, it fairly easy. As you may already know, voltage is applied to your gauge when you switch on your key. The sending unit you just replaced provides resistance across the gauge (via the pink wire) back to ground. The higher the resistance, the less the gauge needle travels. Since you are experiencing a full/pegged reading, you are receiving little/no resistance to the circuit in the gauge.
That stated, check each wire for continuity. You may have a short in the sender wire. Check all connections at both the gauge and your new install. Yes, the gauge may be defective but it sounds like it is shorted to ground which is why the "full" reading.
Good luck.
Mod Edit: From the iBoats Forum
1) +12 volts on the "I" terminal? Yes or No. Yes = go to 2. No = fix it.
2) Solid ground on the "-" terminal? Yes = go to 3. No = fix it.
3) Short the "S" terminal to ground or "-" terminal. Gauge peg full? Yes = gauge is good. No = gauge is bad. Replace it.
4) If gauge is good, is there a good ground at shell of sender and battery ground? Yes = go to 5. No = fix it.
5) Short sender to ground (at the tank). Gauge peg to full? Yes = sender wire ok. No = fix sender wire.
6) If sender wire is ok, disconnect it at the sender. Measure resistance from sender terminal to ground. tank full = 33 ohms. tank empty = 240 ohms, half full = 109 ohms.
Readings roughly correct? Yes = system should be functional. No = replace sender.
