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The oil pressure sending unit is located on the engine block, passenger side by the Distributor. Good luck and make sure you get the right sending unit, there is the simple unit that only turns on a low oil pressure light and the other will send signals to the oil pressure gauge.
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You need to have the oil pressure checked with a manual oil pressure gauge you may have a bad sending unit. If the you oil pressure is the same with the manual gauge then you have a oil pressure problem.
No. The engine will still start, however if the sending unit is not working you will have no oil pressure and you will damage the motor and possibly lock it up. This vehicle can run with the unit not working correctly
The oil pump is in the oil pan and needs to be dropped and being a 4WD you also need to drop the front axle pumpkin to remove the oil pan and replace all the gasket needed. Start with the easy and replace the oil pressure sending unit, it's on the back of the engine to the passenger side of the distributor. You can go to Auto Zone and pick up a new Oil sending unit, just make sure your get the right one, "Sending Unit" Looks the same are the oil pressure sensor but the unit reads the pressure, the other just signal a light to go on and off. It's an easy fix like replacing a spark plug.
I would use 10W-30W, but that should not make the oil pressure read low, have the oil pressure checked with a mechanical test guage, if it tests within normal range then start by replacing the oil pressure sending unit.
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