This is not a VW Bus question, but the electronics of the issue are similar,
so I'll ask.  I was driving my '92 Passat in the pouring rain this past
weekend, through some substantual standing water.  As I pulled into my
driveway, the coolant temperature lights flashes and the gauge shoots all
the way up to high.  This warning light/gauge arrangement is similar to that
on my Wasserboxer Vanagon.  OK, I think, the water has gotten into the
engine compartment and I have shorted out the sending unit.  Well, the next
time I start the car, the warning light goes through its flashing test cycle
but when the car warms up, there is no corresponding movement of the
gauge--pegged at cold.  I have replaced the sending unit (start from cheap)
and this has made no impact on the gauge.  The coolant gauge and fuel tank
gauge are a single unit on this car and have to be replaced together--$90.

I don't have any test equipment, what do you guys think the chances are of
this being a defective gauge?  Electrical parts are not returnable and this
will have to be ordered specially.

By the way, the car is NOT overheating, cooling fans go on and off
appropriately.  I have to assume that the warning light circuit is operating
properly.