sure theres no air sucking in?

 

Have you checked the air gap on the crank sensor? 0.050" is spec I've found 0.040" works good though. And for the bouncing gauge the snubber is the only fix, a mechanical pump will always have a pulse, you just need to calm it before it gets to the gauge, And I'd recommend fixin it quick. The bounce tends to wear out gauges real quick......Don't ask how I know.