Bruce asked if this is a commercial product.

If yes, do not try making your own sensor. In similar cases I used the MicroflexC US sensor. A great product with 4-20mA output. Powered from the 2 lines.

http://www.hycontrol.com/level_measu...onic_level.php

The other option ruce gave with the pot, wll not be very linear, though very cheap.

Ioannis