A few routine problems with the 6.2 include glow plug swelling and burnout due to excessive pulse width, injection pump elastomer ring disintegration, leaking head gaskets, fuel system air intrusion, cracked main webbing, and shattered pistons. Rotating assembly damage often resulted from numbskulls using starting fluid.
The oil gauge symptoms could be caused by a faulty or incorrect sensor. IMSM, 6.2 equipped vehicles used 80 PSI oil pressure sensors (OPS). V8 gas powered engines typically used 60 PSI sensors. All of the GM "gauge" OPS appeared indistinguishable save for the pressure calibration number stamped into the threaded hex nut at the base of the sensors. If an incorrect sensor was installed at some point it would yield a false pressure indication. A poor internal connection between the signal wire terminal and ground also can produce an open circuit that would peg the gauge high.