Since the guage moves when you manually move the float arm, I'd say the guage is okay, and you are right....the float might need replaced or the hole sending unit if they don't sell just the float. I'd look at the sending unit and see if you can pick out a maker or a model number, and go from there.
Wish I could help more, but have no idea what sending units Skeeter used.
http://www.amazon.com/Moeller-Marine.../dp/B000MTCRAA
They don't look too expensive, if thise type would work for you



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