Well, got my truck back last night from my mechanic. They replaced the oil pressure sending unit and got it done for $190. I thought great. Always good to save money. Problem is on my way home after about 5 miles the gauge started bouncing around again. Still not fixed. Did some research last night and thought maybe my oil filter was plugged. I had almost 5000 on the oil so I planned to take it in this morning for an oil change. On the way to work though, pressure dropped again and light came on. Into the dealer this time. Explained what had been going on. First question, did they replace the filter/screen. I wasn't sure, so called mechanic and they had not. So oil change and filter/screen changed. $300 later and everything appears to be better. Long story short, if you are changing the sensor, change the filter because that is the problem.
Now, the service advisor did give me some interesting data.
1 - after 100,000 miles, normal oil pressure on the 5.3 with AFM is 26 at idle and close to 40 at speed
2 - after 100,000 miles, GM considers it "normal" for the engine to use 1 quart of oil every 2000 miles. The dealer recommended oil changes at 3000 miles to be safe because he's seen a few motors blow around 120,000 because of low oil.
3 - even though I get pretty goodfuel mileage right now, I think I want to look into one of the AFM disabling options because it shounds like it causes more problems than anything.
Thanks for listening.