I agree. Perhaps you f'd the sensor during the course of blowing multiple fuses. You might try installing another new sensor ... now that the wiring problem appears to be solved.

That issue appeared with the old pressure sensor! That's why I replaced it in the first place. And the new one shows exact same behaviour. This is why I'm suspecting something might be wrong with the gauge itself...

I'm not ruling out that the gauge itself may be at fault. However, my understanding is that when the problem first appeared with the old sensor, the fuse(s) were being blown. Then you installed the new sensor and the fuse(s) continued to blow. The new wiring scheme appears to have solved the problem with the fuses blowing. But both sensors suffered the blown fuses and both may have been f'd. So it could be that the sensors were damaged, leading to a wrong signal being sent to the gauge. Or, it may be that the gauge was damaged when the old wiring scheme was in place. I guess the choice becomes whether to replace the gauge and see if that solves the problem or install another new sensor and see if that works. I suspect the sensor would be the cheaper option.

You are completely correct in everything you said, and thanks for that!

I gotta say though - if I decide to again replace the sensor, I must go through the hassle of changing the oil again (or recirculating it), and that still might lead me to nowhere. Alternatively - if I go with the expensive option of checking the gauge - I can quickly check it, and if that isn't the solution - I can still return the gauge and get my money back. So I'm actually leaning towards that option....

Ok, I just had another idea. I can always unplug the sensor from the pressure gauge and see if it dials to zero when turning on. If it doesn't, it's obviously the gauge problem.

Agreed ... that's worth checking.