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try techron or seafoam in your gas tank it is doing this because of corrosion buildup around the sending unit float unit if you have warranty like i did they will replace both units at a dealership but you have to show how it is affecting your gauges and it helps if you also know someone at the dealership.
Bought my 99 C5 about 9 months ago and it did the same thing. So I thought well its just something I'll have to fix later. I always use either Chevron (with Techron) or sometimes 76 Union. Anyway problem went away on its own. Might be something to that Techron. Everything working great for last 5 months!
o great just got a C5 this week and i was driving it and once it hit half a tank it went down to zero! i will toss in a bottle of seafoam with a full tank. worried because someone told me it could be the transfer pump or something