The fule gage on my "73" Veloce is not adjusted correctly. For example the low fuel light comes on at 8.4 gal. Also it never reaches the full level even after I have filled the tank to the automatic shutoff on the pump.
Welcome to the BB bdemmin.
Sounds like the float on the sending unit in the gas tank may have partially filled with fuel or is saturated making it heavier than it should be. Another possibility is that the float arm is bent.
It doesn't sound like an electrical issue, as from what you say, the gauge still works. Something is making the float hang up so it reads much lower than it should. I have heard rumors that some owners didn't like that when the red light would come on, it would only give you about a gallon of fuel remaining. It is possible that a Previous Owner wanted to make sure that he always had enough fuel and bent the float rod to have the red light come on early, but it sounds like he may have bent it way too much!
Either that, or the float ain't floating like it should.
Hmmm....nope. Nothing about that in any of my books either. But it really isn't rocket science either.
I recommend that you try and get the tank as empty as possible, work in a ventialted space and have NO exposed heat sources nearby. Disconnect the battery, then remove the padded piece that covers the fuel gauge pickup on the top of your tank. That will expose the piece and you can then proceed to remove the screws and pull out the float and arm. Tell us what it looks like (or better yet...post some photos). Then I am sure that Jim (Papajam) will be able to tell you what's up