I am assuming that the gauge is hooked up to the sender now. I would suspect the tank ground or the sender is not connected at all. If you have an ohm meter, see if there is any resistance to ground on the green wire from the tank. Should see 8 ohms from a full tank or 70 for an empty tank and in between for anything else.
All but the ammeter gets 5 volts from the regulator can. If the other water temp and oil pressure gauges are working and the black wire to the gas gauge is connected, the only thing it can be is the gauge itself or the tank wiring, the sender or the tank ground.
To test the gauge itself is to ground the green wire with the ignition on and see if the gauge heads for full. If it does, unground it because it is not designed to pass that much current for long.
I think grounding the frame is just coincidental with a sender issue.
Craig