OK, now I know what's going on. I totally forgot '78 has a "Engine" light as the oil warning light. As noted by ELCAM, there'll be a tan wire for that circuit (#31, oil pressure) that will run to the back of the block. Either behind the distributor (most likely) or above the oil filter (sometimes there) will be where the oil pressure switch will be located. As long as there is oil on the dip stick & no knocking it could be just a bad switch, wire off the switch's terminal or a damaged wire on the positive side of the problem. If not it could be telling you there's some bad ju-ju going on inside.
Most 1978 warning light dashes I've seen have the "Engine" below the indicator. 1979 changed it up to the "Oil/Choke" with the oil can font. Maybe any members with a 1978 warning light dash could weigh in.
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