1990 1500 Blazer... Gas gauge reads well above full and drops to 1/4 or 1/2 tank reading quickly... was told (bought used) that it is empty on 1/4 tank. How do I trouble shoot sending unit? Also, oil pressure gauge pegs when started but not when key on no matter if hooked to sending unit or not?

It's a common problem for the sending unit to read the fuel level incorrectly due to a defective module. You need to replace the sending unit (basically the sending unit is the whole fuel pump assembly minus the fuel pump). Napa has them for around $150
http://partimages2.genpt.com/partimages/478133.jpg

Sulfurs in non-Tier 1 gasoline can harm gas gauge sensors. Chevron's Techron Concentrate Plus is supposed to clean and protect against this problem in just 1 tankful.