This is a common customer complaint with all Corvette electrical temperature gauges from 1955 to approximately 1972. The customer will usually add the following: I know it's not the sending unit. I've already replaced that.
The reality is that ALL, and I mean ALL, new sending units that are sold presently are wrong. I don't care what the parts guy tells you or what the parts manual says, they are wrong. There is an exception to this, which is to find a New Old Stock (NOS) part. In our experience, these parts have not been available for at least 20 years. Our testing of a known good original sending unit and the currently available part shows that both units read nearly the same until the water temperature reaches approximately 180 degrees. From that point and higher, the correct sending unit will maintain accuracy, but the replacement unit will give you a reading that is approximately 30 degrees higher than the actual temperature. Unfortunately, in our opinion, the addition of a resistor (to alter the reading of the replacement part) is inappropriate. The readings are not consistent throughout the normal temperature scale. They do not vary (enough to be a problem) until approximately 180 degrees. For those of you who have a car that rarely exceeds 180 degrees, you will not notice an inaccurate reading with the replacement sending unit.
Our solution is this: We currently have a GM licensed reproduction sending unit with correct calibration available. The appearance is like the original, including the wording "A.C.- Made in USA.-12 Volt". You may also replace the sending unit with an original type. It may sound difficult, but through research we have found that many GM products from the 50's and 60's used a sending unit that will work in your Corvette. For example, some 6-cylinder applications and any vehicle that used a temperature gauge (not a warning light!) including but not limited to Buick, Cadillac, Chevrolet, etc. Old "junk boxes", salvage yards and flea markets are your best sources. If it "looks" appropriate and has the words "A.C.- Made in USA.-12 Volt" printed (may also have a series of dots or small squares) in the area just above the threads, this is what you are looking for. We have also found that usually the bottom of the unit will be concave or dimpled. Remember…these original sending units are RARELY bad electrically. Sometimes, however, they will leak. Most of the time they were discarded because new parts are so inexpensive and the average owner will install a new one because it "looks nice".