Intriguing problem. Can I just check a couple of things. When you ground the sensor wire, the gauge reads full scale?
If so the gauge and the sensor wire must be Ok.
Are you replacing the coolant sensor with the correct one? You probably know there are two - one for the gauge and one for the ecu.
Is the sensor plug gunked up? or a loose fit on the sensor? When the sensor wire is grounded have you tried manipulating the wire to see if there is a dodgy connection?
When you remove the sensor are you getting coolant running out of the hole?