I don't know enough about your year's grounding and will defer to someone else, but gauges work by resistance. Lower resistance makes it go higher. When you floor it, your resistance is going to zero. If it is not the sending unit, I would look to see if you have a problem with a voltage regulator or some melted wire somewhere. The speed at which it changes is pretty interesting though.
On an aside, you can buy a resistance box on Amazon for under $20. Excellent tool for verifying the gauges are reading where they are supposed to.
EDIT - Then again, if it was just an alternator issue then other gauges would also have similar reactions. If it were me, I would start by checking the resistance reaction of the gauge against a known chart, then use a meter to get the resistance at the tank and then work my way forward.
