Temp gauges are relatively simple things, they are reading a resistance derrived from a thermistor that gets lower in resistance as it gets hotter.
There is a single wire to the 'sensor' which is effectively grounded through the sensor/thermistor to the engine.
So - what can go wrong ...
The engine needs a good ground path back to Negative on the battery.
The sensor needs a good contact to the engine block. Dont fit PTFE tape on the sensor.
The gauge needs to 'match' the sensor (i'm not sure if there are different ones for the S111, there are for the 200 and 300tdi)
To test the sensor you need a digital multi meter that measures Ohms
Cold the sensor should read 880 Ohms.
At temperature (approx 75C) the reading should be 71Ohms.
To test the meter, take the wire off the sensor and touch it to the engine and the gauge should go to the HOT end of the scale.
If you can find a spare 'Dash Bulb' (a 2W bulb) the resistance would be around 72Ohms which would put your gauge in the 'normal' range.
Hope that helps.
