Well, here's what I did:
I took the oil filler cap off and looked down into the valve cover to make sure there was ample oil up in the top end. I also pulled the breather hose to the air filter off and looked in there as well (beware, it's a pain to get back on). The oil was good, so I figured it was just the sending unit, or the guage itself. This is my second '97 XJ, and I just purchased it used from a dealer with a 90 day/3,000 mi warranty. I took it in just before the warranty expired. They confirmed it was the sending unit and replaced it. It is a $75 dollar part (stealership price), and should be fairly simple to replace yourself although I have not personally done so.
The same thing occurred with my wifes '97 XJ and the dealer repaired it under the factory warranty. Just make sure you are getting oil up into the top end. If you are, you are probably OK. When my check engine light came on, I had almost zero oil pressure according to the guage. After a while, the warning lamp went off on its own and the guage readings gradually rose, but were erratic until I got the sending unit fixed. I don't know how many miles are on your Jeep, but my wife's sending unit went bust around 24,000mi, and mine currently has 39,000mi on it. Low miles, but still 5 years old.
The technician I spoke with mentioned that the instrument clusters on '97 and later XJ's have been problematic. I also get crazy readings from the fuel guage, but fortunately that is a recall issue. We had the recall work done on my wife's, but not on mine yet. So, if I was a betting man, I'd say it's just your sending unit and nothing more as long as your motor isn't too hot, and you have oil up in the top end.
Hope this helps.
1997 XJ Sport
Original Owner, Moss Green / Camel, 56k miles, Up Country Pkg, Stock with three exceptions: BFG AT KO, Optima Red Top and K&N Air Filter. Yes, she's beautiful and perfect!
Last edited by Watto; 09-01-2002 at 03:46 PM..