[Dennis MK1 NA]

If the gauge makes this fluttering I am pretty sure it is not the sensor. This sounds like a bad ground up at the instrument panel. Check the wiring diagram for the ground used for all of the gauges at the instrument panel.

The sensor is on the upper right side of the engine. This is the right side when you are looking from the rear of the car. I don't have a '86 but I do have a '87 NA. If this works I have pasted a picture of where the coolant temperature is located.

This is a picture taken of a MK1 engine that is not installed, a backup. You can see the sensor is just to the left side of the oil level stick. The sensor location is in the same place for both the NA and SC engines.

Dennis