If the unit is a Thermo unit, throw it away,. and what are you doing looking at your gauges anyway, water temp is all you need and use lights easier to see and I would guess you are not at the pointy end of the pack, so don't have time to look at your gauges, exhaust gas temp IMHO, should only be used in tuning the engine, after that you don't need it
Anyway - the CHT sender/gauge is supposed to work independently from the electrical system completely, it shouldn't need or be influenced by a bad ground, should it?
Yes, sort of. Not in terms of a good ground or no continuity to ground. But certainly if what it thinks is ground is actually a positive voltage, even if a small positive voltage.
The CHT gauges' sending unit is a thermocouple. The thermocoulple creates a small voltage signal which moves the needle on the gauge to indicate a corresponding temp. When there isn't any difference between the voltage your thermocouple is producing and "ground" the gauge reads zero. If the engine/chassis ground "goes positive" (intermittent) the difference between whatever voltage your thermocouple is producing and it's reference is zero; therefore your gauge goes zero.
My guess is something of a positive voltage is still finding it's way to your chassis/engine ground intermittently.
If you need help call me, I have wired a lot of the local FFs and FCs. If you have the time bring it by and we can repair/rewire it, produce a wiring diagram and show you how to do the basic trouble shooting at the track.
In a race car, the wiring needs to be properly terminated, insulated correctly and secure against vibration. It needs to be clean and wired in such a manner that it stays clean. It also needs to stay dry. Its easier to show you, so if you want we can spend a half day and sort it out.