electrical problem

Rather than messing with the old wiring, I'd just run a new ground wire to the gauge. Use marine-grade wiring, "tinned" wire if you can. That way, you know the integrity of the wire is good. If you still get low readings, replace the gauge.

sounds like the right thing to do, If the extra/heavier ground doesn't help the gauge read correctly then you might need to get a new one. Did you check the leads at the back of the gauge to see what voltage was there? if you get a good reading on the multimeter at the gauge terminals then you might as well change the gauge because it's not a ground/wiring issue and it's old age on the gauge.

Jimbo, I would take that battery to a place that sells them and have it load tested. Make sure it's completely charged first. If the battery tests good, I'd start looking at your alternator. Is all your wiring in good shape (mainly the heavy wire from the Alternator to the solenoid/battery)? Some auto parts stores have bench testers to check the condition on your alternator. But most of these don't put a load on it. Some have a diode checker instead. Just because the engine kept running with the battery disconnected doesn't prove that the alternator is good 100%. If you have blown diodes or burnt windings and the alternators output is diminished, removing the battery cable while the engine is running reduces the load on the alternator. So the voltage is going to go up. The alternator could be supplying just enough amperage to keep the engine running but not charge the battery.

a fully charged battery should read 12.69 volts, while engine running you should see 13.50volts thru out the system or more

Yeah, I've heard someting along those lines about disconnecting the battery. I wouldn't do it on my truck because I'd be scared it would fry the computer but I figured it would be ok on the boat.
I'm going to charge the battery overnight and pick up a new meter tomorrow' unless I can figure out what's wrong with the meter.
Anyway, I should see:
--13.5 V coming of the alternator
--13.5 V at the battery
--13.5 V at the solenoid
right?
What else should I check?

hey jimbo, this may or may not be true, i was taught years ago to never pull a cable while engine is running to check the altenator because it full fields the altenator, true or not i dont know, maybe we will get some feedback on this one, but sometimes you need a fully charged battery to excite the altenator i ran into this last week on a car. the volt meter read 11 volts with the bad battery and i thought because of the voltage the altenator was bad. so i knew the battery was bad anyways and installed a new one, fired up the car and still had 11 volts. sat for a bout 20 seconds and revved the engine and guess what... the volt meter shot up to 13.5..... go from there   Eric