GenI and GENII blocks have a oil sensor port in the back of the block same as the pic as the LT1. Sure sounds like that is where you're leaking from.

i just have to LOL at myself!
the harness i have now doesnt seem to have a plug for this lil guy... and it was so loose it just about fell off in my hand~!

http://partimages2.genpt.com/partimages/50927.jpg

EDIT- for a 90 tbi... which my harness is for.... napaonline has a totaly different lookin part for the oil pressure, the same year the dash changed.... REALLY NEED TO FIND THAT 88 HARNESS lol