If it drops back when the ignition isn't on, then it is kind of working isn't it?
I seem to recall the routing of the wire to the oil pressure sender is behind the belt guide, over the top of the water pump. I have seen one previously "cooked" engine where the insulation had melted, and it is in a prime position to be abraided, jammed underneath the oil filter, or otherwise damaged. It might be worth seeing if simply wiggling this wire makes a difference... otherwise, I'll throw in the suggestion of disconnecting the engine loom, then turning the ignition on... but... I'm throwing that in as a possible test, and would say I would think carefully about whether this could potentially damage any other components first.