The gauge has wires for 12 volts ignition feed and a connection to the sender, correct? I am assuming you disconnected the sender wire at the sender. Disconnect the wire that goes to the sender from the gauge itself. If the gauge does not move with the ignition on then the wire to the sender is grounded somewhere between the gauge and the sender. If the gauge still pegs with the wire to the sender disconnected at the sender then the gauge is suspect, assuming it is wired correctly.