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Stenn, dielectric grease is a good idea when you don't want conductance. The outer threads on the sender should have a dab (SPARINGLY!) of never-seize, which is metallic and conducts to ensure a good ground to the block.
Temp senders are all just variable resistors. The manufacturer, or any good shop manual, can tell you exactly what the resistance of that sender should be at any given temperature, so you can test the sender by putting an ohmmeter on it and then putting it in a pot of water brought up to boiling, and watching the resistance versus the temperature (on a cooking thermometer).
Typically...a sender for a 12V system will have a resistance around 20-40 ohms on "READY TO BLOW!" and 200-240 ohms at room temperature, engine unused and cool.
Any other way of testing these senders, besides an ohmmeter with the factory specs, is just guessing. (Which is sometimes good enough.[g])
You can also be getting a false reading because the wire leading to the sender is corroded or not making good contact. Anything that reduces the voltage going to that sender (bad contact, corroded wire, poor crimp, bad ground, etc.) is going to make it read incorrectly. Often when you think you've pulled the sender and cleaned it--you've really fixed a loose or dirty wire that was contacting it, etc.