Loss of oil pressure

I would start with the sending unit.

Take the wire off the sending unit and ground it out. This should make the factory gauge go all the way up as far as the needle will go. This is to verify that the gauge is working.

After that I would at a minimum take the sending unit off and make sure that the passages in it and the extension from the engine block aren't gunked up. If they are you can take the extension off the engine block and clean it out and also clean out he sending unit. I would probably use some carb cleaner or TB cleaner.

If you put it back together and still have the same issue I would get an inexpensive mechanical gauge and temporarily hook it up so that you can see it when you take it for a drive. If the mechanical gauge shows good pressure then most likely you have a sending unit going out on you. If the mechanical gauge shows the same type of pressure that the stocker is showing then you probably have some internal issues in the engine. Could be an oil pump going out, worn bearings, etc.

I like to see a MINIMUM of 10 psi per 1000 rpm on my cars.

On the drivers side front of the engine there is a little round canister looking thing that has one wire attached to the top of it. It is mounted right behind the power steering pump. This is the oil pressure sending unit.

I usually have to take the power steering pump out to be able to access it if I am gonna take it out or mess with it. Just gives you more room to work with. The sending unit threads into a hexagonal tube that is attached to the side of the engine block. This is the extension piece I was talking about.

Its dark here right now but if you can't find it let me know and I can take some pics and post them up tomorrow so you can have a visual.

What the sending unit does is it varies the resistance to ground based on the pressure it sees. The changes in resistance change the amount of electrical current flowing to ground from the gauge. As the resistance changes the guage needle moves. This is just a pretty basic overview of how a sending unit works. Nothing really in depth.

I had the same problem, tried the sending unit, and my gauge still read low, so i bought an autometer gauge, and have a normal reading with the rise on acceleration. my stock gauge was wacked out.