I've done some work on automotive level sensing. It is a PIA. As said before at any given time you have no idea where in the tank the fuel is. And a section of tank where fuel can run in and out slowly doesn't work either.
I think vinceherman had very good suggestion regarding trying to measure fuel consumption.
I have no expedience with RC engines, however if you could measure the inlet air flow you might get a better indication of fuel consumption. If there is a inlet air filter or passage, perhaps the pressure drop across it could be useful. And I'm not sure if it is practical but a hot wire anemometer might work as well. Similar to the mass air flow sensors in some of the older vehicles.