If the clear coat has degraded enough to be visible, sanding it isn't going to do anymore harm, providing you don't go at it with a belt sander. <img src="/forums/images/graemlins/smile.gif" alt="" /> However, before trying any wet sanding I would recommend picking up a hood(doesn't matter which brand) w/bad clear coat and try refinishing it first. This way you would get an idea of what might work for the short term, and not have to worry about making your truck's paint look any worse. It will also make for a good practice piece if you decide to try repainting the entire truck.

On practice hood:
Test one, use some 2000grit wet sandpaper and light sanding, then followed up with polish and wax. You could use 1500grit, but w/2k you are less likely to sand through the clear, then you are w/1500.

Test two, if the polish doesn't help, you could consider spraying a layer of duplicor lacquer over it, basically adding a fresh coat of clear coat. You would need to strip the wax and polish off before spraying the lacquer on it. You could even leave an area unsprayed to see what type of edge the lacquer leaves, and whether or not it can be wet sanded to blend in w/the factory clear.

Test 3, try repainting the hood w/rattle can paint, wet sand, polish wax to get an idea of what repainting will look like, before and after wet sanding or the use of an aggressive polishing compound.

With the life expectancy of clear coats only be 7yrs, none of the cheap fixes fixes are permanent, the clear will continue to fade, peal and separate from the base. The only real cure is a complete sanding down to the base, new base and new clear. This is where I am at now w/my '90. The sad thing is it is only the clear coat that has been applied for repairs that is fading and flaking off, w/the exception of scratches from 20yrs of wheeling and swirl marks from washing/polishing/waxing, the factory clear coat is still good.