Since it is jumping around, the first thing I would check is all your connections, especially the ground. They must all be clean and tight. Your tach gets its signal from the stator which also provides AC to the rectifier. If it is an older Merc you probably don't have a regulator. The easiest way to check the rectifier is with a volt meter. Connect it to the starting battery and get a reading with the motor not running. Then start the motor. If the rectifier is good you will see the voltage rise. You won't see much of a rise until about 2K RPM so its best to do this in the water. If connections is good and the battery is getting a charge, then its probably new tach time.
Fair Winds and Following Seas
Bill H. PTC USN Ret
Chesapeake, Va