In my opinion,
As soon as you "grounded" the sensor and it deflected...
I would say the sensor works...
As you state...:
-Ok, I don't know much about the meter but when I touch the 2 leads together it goes to zero as it should, when I touch the pos lead to the sensor connector and ground to engine block, the dial goes about 1/4 of the way over. this was with engine running and thermostat open. Also tried other ground points on the engine and all are the same reading. It will not move my gauge in the car though. I then loosened and tightened a few times to see if I could get a better connection and no change.
Essentially you are performing a "continuity" check.
When the multi-meter leads are touching...(in the Ohms setting)...you are showing a "SHORT"
That means: "No resistance" or no Ohms. (complete continuity from black lead to red lead & thru meter)
When you have resistance: Such as "meter dial goes about 1/4 of the way over"
If your meter does not "deflect" then it is an "OPEN" and that is the opposite of a "SHORT"
You are reading a resistance. sensors need resistance.
The ultimate resistance reading is an "OPEN". No continuity at all.
Check voltage at sensor with engine warm. It should read: 0.8 VDC to 1.5 VDC.
I will try this later tonight
NOTE: do you have a 2 "terminal" sensor or a 3 "terminal" sensor?
I would say your sensor operates.
BIG QUESTION: Why did you change your temp sensor?
Same reason? No reading?
Then that means 2 sensors installed and no reading.
Time to check wiring.