instant stall, fuel gauge spiking to full

(88 XJ-ltd, 4.0, auto) Ok so i have been having this problem since i got my cherokee. I should note that this only happens during or after it rains or is moist out. What happens is my XJ stalls instantly , no sputtering, and the fuel gauge jumps to full which it rarely actually is. Now I think i know what the problem is but my attempts to remedy it have failed thus far. underneath the vehicle near the tank the previous owners in all their wisdom stripped the coating off of all three wires that go to the sending unit. Probably some attempt to verify the pump worked.
Would wet conditions cause voltage to bounce between these and short out the pump? Thats the only thing that makes sense to me really. I have used a cruddy old can of liquid electrical tape and then wrapped the wires up with black tape but it still seems to do it after driving in wet conditions.Just wanted to confirm i am on the right path before i redo everything. Another possibility is a short after the wires enter the unibody through the rubber grommet...do the continue there till the engine bay or do they come up through the floor into the cab?

My guess is this is an old problem that has come back, as suggested by the stripped wires.
The problem is likely an intermittent short to ground in the fuel pump/sender wiring but where it is, who knows?
To help trace the wiring, locate a FSM manual, for your year XJ. It will show where the fuel pump wiring is located. Then start tracing it back to the fuel pump relay, looking for bare wires.
Twice, I have seen electrical problems caused by trim screws replaced with longer screws or in the wrong place. Too long a trim screw can poke into a wiring harness, causing all sorts of interesting reactions.
Had this problem with the XJ's towing lights blowing fuses occasionally, it took months to figure out that I had replaced one of the interior trim screws in the wrong placed and it had just barely poked a wiring bundle.
Intermittent electrical problems are the hardest to solve, methodically working your way from one end to the other is the only way to solve it.

Could be a ground issue. Ohm test from somewhere near the pump and a good chassis ground. What I mean by good chassis ground is most any spot on the undercarriage you can reach easily and scratch the undercoating and paint off until you get clean metal.

I actually spliced an extra ground in right about where you are talking about. I'm kind of anal about my splices, I crimp then solder and cover with shrink tubing. And if I'm feeling really anal, I use super glue on the ends of the shrink tubing.

I also had a connector meltdown where the harness comes out from the inside door sill kick panel and goes up over the wheelwell. If that connector melt down it may effect your pump and the gas gauge.

The higher the resistance in the gas gauge circuit the higher the fuel gauge reads in the Renix. A bad ground can affect both the pump and the gauge sender.