A further update (as I know us folks on forums love to follow a thread though to conclusion). The gauge is definitely working - the more I've driven the car lately, the needle is definitely dropping. It has moved from 1/8 below half (where it was maxing out when filled with fuel) to 2/8 below half.
I've pretty much convinced myself that it is dropping at a slower rate than usual - which could point to a fault with one of the two level sensors in the saddle tank - my logic being that if it is displaying the average of one sensor working correctly and one duff sensor, then it would fall at half the usual rate. I haven't backed up this theory with any data though - will have to brim the tank and actually take some mileage readings to do that. I think that's the next step here.
All of that may still be incorrect - it may just be a calibration issue as others have pointed out. To be continued...