1990 240sx KA24E Temp gauge malfunction

[XxBLiNdxX]

I was driving on the freeway and my temp gauge was reading normal. I exited the freeway car shut down the second i pushed the clutch in. Car was smoking badly even though temp gauge read normal. I popped the hood then tried to restart it and it would turn but not start and then the temp gauge popped all the way to max. Who knows how long I was driving with it at max since it was reading normal temp and I drove for about 20 miles. Pretty sure my engine is royally screwed now because of this. I would of pulled over right away if I knew it was overheating but didnt get the proper warning. Another weird thing is that I watch it cool a little from max and then tried to restart for the hell of it while I waited for the tow truck and temp gauge went from being overheated to being under normal temp even though the car was still steaming and smoking. Also my fluid levels were topped off before I left, still need to look everything over but it got towed at midnight and I cant see in the dark.

So what the f would cause the stock temp gauge to malfunction and royally screw my engine? Im pretty sure the damage is bad and I will probably have to rebuild. Should I replace the temp gauge? Is this something that would be covered unde rlifetime warranty like the seatbelts?

Update: Radiator ran dry for I dont know how many miles. Leak appears to be from the water pump seal which I had a leak in the same spot before and took it off and reapplied gasket material and it sealed it up but opened up in the same spot but thistime it was major. Car wont start now, everything turns but the engine wont kick over at all. Head gasket is blown, its shooting out what seems to be water from the head underneath the exhaust manifold, which im assuming is due to extreme overheating and I probably warped everything.

Modified by XxBLiNdxX at 12:23 PM 8/22/2009
Modified by XxBLiNdxX at 8:25 PM 8/22/2009