I think I'm understanding (kind of), I'm not electrically minded, bodywork is my fortè. None of it worked when I bought it so I've no idea how it should be. The 3 wires from the sender go to a multi plug on the engine side of the bulkhead and then up to the gauges. I do have another loom that I could cast my eye over to work out how it should be (if that one hasn't been modified). I do have a Haynes with the relevant wiring diagram, but I thought the wires went from sender to gauge with nothing inbetween. I'll have another look at it tomorrow. This is the first I've heard of something in between the sender and gauge so I haven't actually been looking for anything else, just trying to make it work with what I've got. It does make sense though, like you said, as it is the fuel gauge will constantly move whilst the diesel moves around in the tank.
Thanks!