The 5 volt regulator is a tin can device located on the back of the dash.
If he is getting a low reading, and other gauges are working okay I would suggest that it is okay.
Short out the wire at the sender to the chassis while someone is watching the needle.
Dont leave it connected for too long.
If the needle goes full scale the gauge is likely okay.
That means you likely have the wrong resistance range sender for the gauge.
With the wire off the sender and the ignition turned on, the voltage on the wire should be 5 volts or thereabouts.
You could also try a separate grounding wire from the body of the sender to the chassis to see if that changes things.
Cheers
Rob