In my 2003 Chevy Avalanche the oil pressure gauge is going all the way to 80 and stays there. Where is the sensor on the engine? Any suggestions?

I would want to know what the actual oil pressure is. The sending unit or the gauge on the dash could have failed.
There is a pressure relief valve to prevent oil pressure from going too high, but staying at 80psi would not be good for a long time.

If there truly was no oil pressure it would make a horrendous rattle sound from not only the rods but especially the hydraulic valve lifters. It sounds like probably the pressure sensor or the wiring, or both are not reading correctly. The older Chevy V8's had the pressure sensor on the side of the block, under the exhaust manifold where it would just cook it and make it leak and not work right. I always kept a direct reading pressure gauge with hose and adapters in my tool box when I felt I couldn't trust the onboard gauge. Many times it proved the gauges and idiot lights wrong.

Another gauge needs to be connected to the car to check that oil pressure sensor or the gauge itself is not the problem.

If an independent gauge shows the same readings I would suspect a sticking oil pressure relief valve.

Bad sensor

On top upper side of bell housing on the engine. This page has a diagram and info.Look for the red arrow

http://www.2carpros.com/questions/chevrolet-avalanche-2003-chevy-avalanche-oil-pressure-sending-unit

Sounds like the oil pressure sensor. Thatt is the easiest thing to change. If not its the gauge. Put voltage to the wires from the switch and see if the gauge stops jumping and stays pegged, if it does its the switch Good luck

Check the oil pressure sensor..

Oil pressure gauge is not getting good ground. Check wire.

either gauge is bad or oil pressure sending unit

80 is on the high side for those... possibly a sending unit issue