What you can do is get a piece of PVC and something that can act as a float, like strofoam. Put that inside the tube with say two small magnets to balance it.
Noe you can detect the position from outside with a reed switch or hall effect sensor, Your gauge probably has to be a bit smarter because it needs to keep track of where things are. It would get a blip when it passed a point, but the level would not be continuous as you have now.
The float can't rotate, so a swuare rod may have to be used.
Another idea that comes to mind is stainless rivets, but not sure how that would work out.
To avod corrosion, sensors like yours should be exicted by an AC voltage rather than DC.