Speaking of urgan legends, it's a not true that FAR 23 applies to aircraft certified under CAR 3. CAR 3 requiremnets are not as stringent regarding the accuracy of the gauges (or a lot of other stuff). FAR part 23 does not apply to Jays aircraft. However FAR part 91 does. Technically, he was illegel, but he did use a lot of common sense dealing with the issue. The FAA would probably hang him out to dry if he crashed due to a fuel issue, and placarding the tank really didn't make the flights legal.

FAA regs are written to cover any plane that could be flown by any rated pilot. They don't make exceptions to the situations where an owner is aware of a issue and takes steps to fly safely inspite of the issue. So even if the owner took sensible steps to fly safely under the circumstances, he is still illegal, but then again, so am I when I drive 60 in a 55 mph speed zone.

His biggest mistake was bringing it up in a public forum where every one could fuss at him. If he flew with the tank empty and didn't have it placarded, the gage would be right, and the FAA wouldn't know there was a violation - as long as he didn't fess up to knowing it didn't work when there was fuel in the tank.

While sensible, the placard is incriminating and if he is keeping fuel in the tank, then he is using it and the gauge should work. However this isn't really a terrible crime for a person using his own aircraft and sensibly dealing with the issue. He is probably aware that the FAA might make a point out of it if he crashed. But he made a descision to keep flying based on what he considered an exceptable risk.