OK - the gas guage is a red herring, interesting but unrelated and most likely the sender in the tank.
Your converter was likely over loaded with extra oil in the exhaust...clear the code and see if it comes back...
Your flame trap was plugged with sludge - not uncommon in cars that aren't maintained well. A plugged flame trap means no PCV and the build up in pressure inside the engine forces oil past any seals, like the cam seals.
Simply put, sludge is caused by the oil breaking down from contaminants. It breaks down faster under high heat, low oil level, frequent short trips (that allow moisture to build up in the crankcase). Cheap oil breaks down quicker than good oil (has to do with the additive package in the oil that manages the contaminants...)
You still have an engine full of sludge, sure the flame trap is clear, but the rest of the motor has it...your mechanic said so...
To fix sludge, fix it slowly. You can try an oil detergent called AutoRx, but absolutely no motor flush or any strong solvents, they attack your new seals and thin out the oil, potentially damaging the engine...The new oil has detergents, and the slow cleaning is best. Any quick cleaning runs the risk of getting all that sludge circulating, where it can plug the oil pump pickup or oil galleries and it's bye-bye engine...
So, change the oil and filter with good-quality oil, synthetic is best. Change after about 500-1000 miles, change them again at about 2,500 and then again at about 5,000. You can go back to regular intervals IF you use good quality oil and don't subject the car to severe service, including short trips, towing, extensive idling.
Any of those operating conditions are reason to change the oil more often than 7,500.
Or, you can do yourself a favor and go to synthetic...
And for Pete's sake, stay away from discount store brand oil and make sure that the oil you do buy meets the specs in the owner's manual...
Current Fleet:
2016 Tundra Crewmax 4WD 1794
2005 MB S600 (126K, Michelin AS4, HPL 0W40)
2005 MB SL600 (55K Michelin AS4, Mobil 1 0W40)
2004 V70R (143K, six speed M66, HPL 5W40)
2004 XC90 (235K, HPL 0W30 Euro)
2002 V70-XC (295K, HPL 0W30 Euro)
2002 V70-T5 (225K, IPD bars, Bilsteins)
2001 V70-T5 (125K, IPD downpipe, cat back and other mods)
1932 Packard Sedan (straight 8, dual sidemounts, original paint and interior, Shell Rotella 15W40)
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