Most gauges ground through the sensor body to the engine through a ground strap to the frame and then back to the battery. The sensor is basically a variable ground, the warmer it gets, the less resistance to ground, the higher the gauge reads. A short caused a solid ground, which causes the gauge to go to max. Check the engine ground as well to ensure it's still good as well.
Only recommendation I have is to start at the sensor and follow the wire back through the loom to the bulkhead, then pick it up again inside the car and follow it to the gauge. I had one that was burnt through because it was ever so slightly touching the exhaust manifold when corning, and would throw a warning light on one of my cars when cornering. Luckily it was easy to find and fix in that case.
Doug