88 mustang fuel only works for the top half of the guage?

The fuel level sending unit in the tank is going bad.

New pump is putting out more preasure now so the needle and seat valve in the carby is having difficulty regulating fuel levl in carby

You shorted out the wireing harness, going to the guages, Possiblly evan a fusible link was mess up.

better change the fuel filter first,if no help,possibly a backpressure problem,like a clogged cat.Exhaust note would sound like a "jet" if the exhaust was plugged.
Injected? if so clean the maf also

checked fuses???

Hello vanilla_16: My name is Roger and I will help you. The fuel pump on your vehicle is located inside the fuel tank. The best way to access the pump is from a hoist. The hoist allows you rom to work over the top of the fuel tank to access the fuel lines. The tank is heavy when full and not easy to handle while lying on your back. I would also suggest you replace the fuel filter at the same time. A bad filter will knock out a fuel pump. Should you need further help please just ask. Please rate the answer you received. This way I know the information was helpful. Thank You for using Fix Ya. Roger

I do not think you have any dents in your tank, nor do I think its empty when the guage indicates that it is.

It is more then likely a fuel level sending unit which is located inside of the tank. They are not fun to replace, empty the gas, drop the tank, and then replace the sensor.

The fuel tank has to be removed from the car. The pump is located on top half of the tank.

Bad gage

i suspect a broken wire between guage and sender unit in tank, but the sending unit could be bad,find the wire to the float guage in the tank and disconnect it, if fuel level does not change then then touch the wire to a ground, if the guage changes then the wire is ok and the unit is bad, if it does not change check wiring and guage for faults.