More than likely you have a broken wire from the sending unit to the gauge.

However, you need to understand that the system does not measure or report oil VOLUME. It reports pressure. The fact that you have oil in the system is not relevant if the engine is not pumping, ie, pressurizing the oil system.

My dad once had to replace a 335HP, Ford 390 because the oil pump failed. The crankcase was full, the oil was just not being circulated.

In most cases, the pressure will be in the normal range even if the engine is several quarts low. Total loss of oil pressure, as opposed to lack of REPORTED oil pressure is almost always an immediate and catastrophe event.