The typical sensor setup uses a resistor block (the plastic/epoxy blob thing that the sensors connect to) and provides a stepped voltage that the monitor display shows as varying lights, stepped because the tank contents short out one or more of the resistors when the level covers the sensor probes.
You apparently either have a malfunctioning display unit (possible but not too likely), a short in the wiring or the resistor pack, or a miscalibrated display unit. Some of the displays have a little adjustment potentiometer to set their sensitivity, and some just have fixed resistors to calibrate them from the factory. If it's the former, tweaking the potentiometer with a little screwdriver (which may require removing the display from its bezel to access the circuit board) might help.
I would tend to suspect a damaged resistor block or a short in the wiring somewhere.
