The temperature gauge is reading low most of the time all of a sudden?

Not likely an issue caused by the oil as the cooling system sensor is on top of the engine between the cams and between cylinders 2 and 3. It could be a bad valve cover gasket letting oil into that area or the sensor is damaged by corrosion which is somewhat common. Replacement is simple, pop the cover off, unplug the connector and unscrew the sensor. Screw in the new one and connect it and put the cover back in place. If you find corrosion you will want to get a replacement pigtail and wire it in as cleaning usually isn't enough.

Single sensor up on top of the engine. Part #8S4Z6G004A Ford used both types on some applications when they used a different control for the cooling fans and gauges, then they went to the single CHT on others.

I'm not a big fan of them simply due to the way they read, the thermal mass of the head or block can throw the sensor off. On the ones with both sensors, it's common to dee a 10†15-degree difference between the coolant temperature and the head temperature. However, they can be handy, I've used them on air cooled engines to monitor the head temperatures.
One thing I forgot to mention, check the bore it goes in for corrosion as well. Aluminum oxide is a good insulator so if the bore gets corroded it can change the readings.

Okay, the symptoms are rough running, and it doesn't seem to be getting as warm as it did, what is the heat like and does it seem like it is getting up to operating temperature slower? My first thought would be a thermostat that's opening early or stuck partway open. The easiest way to tell for that would be with a non-contact thermometer and use it to check the temperatures of the hoses and engine to see if the thermostat is staying open. Normally the top hose will stay cold until the thermostat opens, if you start the engine and watch the hose temperatures you shouldn't see or feel the upper one getting hot until the thermostat opens, if instead you feel it start to warm up as the engine runs the thermostat is open.