I donÆt know where the sensor is located for sure; I haven't had any issues with any sensors on my XJ. But, it should be a sensor (I would guess cylindrical in shape) that threads into the side of the block and I would guess it has one wire connected to it.

I suggest checking the connection first because itÆs a simple check, and a buddy of my had a Pontiac of some flavor, and the Oil pressure gauge would peg out to max as soon as he turned the key on, engine not even running, and never moved off the peg until power was turned off. The engine was quiet, and the oil level was just fine, we assumed bad sensor too. A couple beers, and the 2 of us poking around under the car and under the hood, for about 20 minutes and we found the connector had come loose, and just wasnÆt making a connection any longer. We clipped the plug back on the sensor and the oil gauge read perfect. Go figure, things work better when hooked up.

It could be a bad sensor too, but you might as well check whatÆs easy to check before you remove any parts, and spend any money. Just my 2 cents.

Sean