There is a Chevy Service Bulletin about this problem # 04060207 regarding the use of non approved cooling system additives or the possibility of oil in the cooling system being the cause of the problem. I don't have a location for the switch, It has to be in the coolant reservoir or radiator but the color of the wires on the switch are black/white and the second wire is yellow/black.
my low coolant light remains on we didnt have the money for coolant, so we used just water and it does look like there is oil at the bottoem of the reservoir, could this be the cause for the light remaining on?
If you do not have the money for coolant, you probably won't have the money for an engine rebuild.
If you are seeing oil in the reservoir then you have a blown head gasket or cracked head. Either way your looking at least a grand or two to rebuild the motor. Or if it's been going on a long time you will eventually have yourself a 2,000lb paper weight on your hands!
I had to clean out my sensor due to oil in my coolant, which i am still having problems with occasionally. its located on the passanger side of the rad, about half way down. when you pull it out, plug the hole with something right away.. you'll lose lots of coolant.