The first thing to check is that the sensor itself has not worked loose, as they are sometimes only held in with a plastic clamp. It's not terribly visible although you can do it from above, it may be easier from underneath.
Examine the clamp too, as on some the bolt to 'clamp' it is simply not doing much due to worn plastic 'threads' in the clamp.
Substitution is a sensible test. Its not unknown for them to die after a clutch change (or other operation involving transmission removal), they are not too expensive either. Used ones may not work, due to being removed and refitted, at least in my experience.
Next, examine the wiring. There might be a plug on it, unplug this an check for corrosion. I think this is around the oil filler area. Pay careful attention to the routing of the wiring too.
The slightly less common failure point is interference from the glow plug really (yes, really!, and I have seen this a few times on 406's) , to confirm this is the cause:
Engine warm (important) , then unplug the multiplug from the glowplug relay. You do NOT need to undo the main heavy wiring feeds, just the multiplug. Ensure its somewhere where it cannot touch anything it should not.
Now start the engine (see why I said you want a warm engine?) , if the tachometer now works, it is interference from the glowplug relay. You can try replacing this (scrapyard one is probably best as it might not fix it) , or move the sensor wiring around a bit. Try to keep it away from the starter if possible too.
Other causes (apart from sensor failure and wiring issues to the instrument panel itself) include an internal fault on the tachometer itself (rare) or a hairline break in the pcb on the instrument panel. The 'easy' way to test this is to substitute another panel temporarily if possible.
Although not strictly a 'fix it' guide, I hope it will provide a bit of assistance.
Finally a couple of my thoughts:
99.9% of XUD engines have the TDC sensor fitted, even if they did not have a tachometer as part of the instrument panel. It may be possible to fit a panel with one, but that's not what this article is about.
The tiny, tiny signal voltage produced is far to small to be measured without an amplifier (usually built into the panel) or possibly an oscilloscope.