Temperature sensor problems

[Big Bad Dodge]

My buddy who has the exact same 98 GTS as I do (our VINs are literally two digits apart) recently took his car into the dealer because the temp gauge in the dash is not working.
When we connect an Ultragauge to the OBDII port, it reads the temperature perfectly. The Dodge mechanic insists the temperature sensor is broken. My friend sent the e-mail
below to the mechanic, and while he waits for a reply, I thought I'd post it here in case you all have a better idea.

Text to E-mail to Mechanic
Before you change the temperature sensor, please ask the mechanic to answer one question, because his diagnosis of a bad sensor does not add up to me.
If you measure the temperature off the OBDII port, as my Ultragauge does, it reads the temperature properly. How is it possible to have a bad temperature sensor and yet
still have the temperature read out properly? Isn't it more likely there is a problem between the mechanical temperature gauge in my dash and the ECU or wherever it draws its
signal? If this isn't true, how is it the OBDII port perfectly reads the temperature? I know when I looked at it, when I disconnected the temperature sensor, the OBDII port could
not read the temperature. When I reconnected it, the OBDII port read the temperature correctly. How is that possible if the sensor is bad?

 

[AZTVR]

I know when I looked at it, when I disconnected the temperature sensor, the OBDII port could
not read the temperature. When I reconnected it, the OBDII port read the temperature correctly. How is that possible if the sensor is bad?

If you take a look at the factory service manual, you will find that the engine temperature sensor provides input to 3 different items on 3 wires coming from the sensor (plus there's a ground wire.) It feeds the gauge, the warning light, and the ECU/PCM. The way it is drawn in the schematic shows that the signal for the PCM going through a different sensor circuit than the signal for the gauge.

(It sounds like you don't have a manual. It so happens that the only version accessible online is for a '98, thanks to a user here. https://docs.google.com/file/d/0Bwwp-Q86mAaic3J5MWNKS2pLdk0/edit?usp=sharing Page 8W-30-14 is what shows it in detail.)

PS, I'm not that smart. An experienced tech mentioned this a week or two ago in another thread on one of the forums,

 

[Red Raider]

AZTVR,

Thanks a lot for your great explanation. That answers my question as to how the gauge may not be working but the OBDII port is still able to read a temp.