Being that it has a mechanical fuel pump, and the gauge "is" switching, id have to guess that there is a clog someplace either in the switching valve or the line to the rear tank or the rear sending unit strainer. If the switching valve is clogged you maybe able to clean it out instead of replacing it. In my 85 with the 6 port valve the fuel gauges will not switch unless the valve successfully switches, however that only means the switch is getting power and the the mechanism inside is sliding back and forth not necessarily that the valve is functioning. As for the flickering test light, the wires that run to the tank sending units are suppose to blink those are the fuel gauge wires. If you have erratic flickering of any of the wires then you have wires rubbing someplace and are about to shortout.