Re: My 86 442: update 5-19-10
Nice work and great project.
In terms of the in-dash fuel gauge, are the other in-dash gauges working (volt/temp/oil)? If not the fuel gauge is not going to work or be accurate as they are tied together. Had the same issue on the 81 and 86. On the '86 I removed the gauge cluster and cleaned the traces / connectors and it is working good. You could try the "BFH" technique and hit the top of the dash with your fist while running to see if it moves. Another thing could be a short or chafe in the sending wire, a bad ground or possibly an incorrect (ohms) or bad sender.
As far as the oil concerns, if it's the original engine shouldn't it have roller cam / lifters and not flat tappet? I know at the beginning of the thread you were talking 5A versus the stock 7A heads, but didn't all '86 - '90 307s have roller lifters? If this is the case running the ZDDP may not be much of a concern, IMO, but agree with the others, that the Valvoline VR1 is good.