I just had to replace my sender unit in my 2001 SXR600. My gauge would function just fine until 1/2 then it would drop to E and stay there.
It turned out that the pivot point for the float in the sending unit was worn and it would cause the "wiper" in the resostat to actually lose contact with the winding. This resulted in no reading at all on the gauge.
I replaced the unit, but I kept the old one as a spare and bent the wiper a little to ensure it always contacted the winding.
Hope this helps.
Cheers,
Exciterfan