I expect the wire is damaged somewhere and its shorting to earth, a dead short to earth puts the needle in the red.

DanRSturbo, i know there is a lot of controversy over these temperature senders, but my old Mk1 Orion had a S2 engine in it and the gauge always worked fine, and now i think of it im sure my current Mk1 has a later sender in it because the connector has been changed for a blue crimp which is the bullet style (mk3 senders are spade end)

I'd say its a short personally