The first thing to do is to determine whether the problem is with the gauge or with the sender inside the fuel tank. Unplug the four-prong plug at the top of the fuel tank: You can reach it without lowering the tank but it takes a bit of maneuvering. There will probably be three wires going to the plug, one thin one for the gauge and two thick ones for the fuel pump. (Mine is an ’87 but I think your ’88 would be the same.) Connect a resistor between the thin wire and the chassis and turn on the ignition (don’t try to start the engine.) With a 10 ohm resistor (from Radio Shack, for example) the gauge should read full. With a 73 ohm resistor it is supposed to read empty. (73 ohms is not a common value, use 68 or else use two 150 ohm resistors in parallel.) If the gauge does not read correctly with the resistors, the problem is with the gauge or the wiring, or conceivably with the instruments voltage supply regulator but that would affect other gauges as well.
More likely the problem is with the sender, inside the fuel tank. For this you have to take the tank down: This is not too difficult, but (a) be sure to siphon all fuel out first to reduce weight, (b) you’ll have to undo the clamp at the bottom of the fuel filler hose, (c) you will have to undo two little plastic clips holding the fuel supply and return lines onto the tank fittings. Once the tank is down you will see on the top a circular ring, about 5” across, holding the sender and fuel pump assembly in place. You have to tap the tabs on the ring to cause it to unscrew: If it has been in place a long time it may get bent up. Also if it has been in place the O-ring under the sender/pump assembly flange will have to be replaced, it will have swelled enough you won’t be able to get it back in the groove it lives in. Once the ring is out, you can lift the sender/pump assembly out: You will have to bend the rod for the sender over a bit to let the float and pump fit through the hole, but it will spring back.
You will see that the sender has a float on the end of a rod: The float rides up and down on the fuel, the rod moves a contact along a resistance element. Two things can go wrong: The float can spring a leak and fill up so it stays on the bottom of the tank no matter how much fuel, and the resistance element can get a track worn in it where the contact rides. Mine had both. Ford will sell you a replacement for the whole pump/sender assembly, but no smaller sections.
In mine the float was very traditional: I would expect it to be plastic today. Mine was made of very thin brass soldered together, and had a hairline crack. I soldered the crack: If you have not thought about the problems of soldering something which is filled with gasoline, get help. In one end of the float there is a small hole which was filled with solder, opening that will let you blow the fuel out and thus locate the leak if it is not obvious. I should have mentioned how to tell if the float leaks: Slosh it and listen for fuel inside. In case mine ever cracks again I am trying an experiment: I took some old 35mm film cans of plastic, Kodak variety, which turn out to be quite gasoline-proof, and have glued them shut with different sealers. I have them submerged in a jar of gasoline and in a while will see which if any held up to the gasoline. Using one of these would require bending the float-holding rod and doing some improvising, the original float has a groove in it which the rod snaps over. But it looks doable. (Don’t try a fishing float: For fun I put one in my experiment, and within a few hours it was a puddle of goo in the bottom of the gasoline.)
The resistance element is inside a plastic cover that can be snapped off of the pump assembly by pushing a little plastic tab to one side. I bent the little contact so that it would ride along a different arc. You can also check that the little fingers which ground the moving contact are bent out enough to make good contact with the steel cover plate. With the plastic cover back in place you can move the rod/float up and down and measure the resistance, which ought to move pretty smoothly over the range 10 ohms (float all the way up) to 75-85 ohms at the other extreme. If you can get a leak-free float and a smooth resistance change you are set to put it all back together.
If you do all this and want to know what the tank really holds, not just what the specs say, when you put the tank back you can put in a known quantity of gas (say from a 5-gallon container) and then drive to a gas station and see how much more is needed to fill it. On mine 5 gallons takes it to just a little less than one fourth of the way up the gauge, but the whole tank holds about 15 gallons. Most fuel injected vehicles lie a lot to keep you from running out of gas, you really don’t want to wash up the stuff from all around the bottom of the tank into the filters and also the gas flow cools the pump(s).
Good Luck,
Bob Wilson