The guage works like a small voltage meter. It recieves Positive voltage from the dash wiring and the ground is through the oil pressure sending unit. If you ground the sending unit wire it should peg the oil pressure guage. So you don't want to ground it unless you just want to test the guage and then only for a very short time.

I would do that and see what happens. The engine does not even need to be running, just the ignition switch in the on position.

It could be a bad guage or voltage regulator under the dash. The guages have a small step down regulator that drops the Positive voltage to 5 volts for the guages. If the Oil, Water, & Fuel all three quit working it is often the under dash regulator.

Hope it helps.