Hi Mike,
I have the same engine/prop setup and had the same problem with fluctuating fuel flow readings you describe. My Floscan sensor is mounted like yours in the photo.
After some online research I found info that suggested that the readings could be affected by back pulses from the mechanical fuel pump that caused the rotor in the fuel sensor to stop or even back up causing the sensor to "miss-count".
I first installed a Matronics Pulse Dampener after the sensor but I saw no improvement. I removed the Pulse Dampener and installed an in-line fuel filter after the sensor. That seemed to solve the problem..readings at all fuel flows are now steady. I think just about any large filter would work, but
here's one I found that's not too expensive and the ends can be drilled and safety wired if you wish.
I won't promise that it will work or even that the cause of the problem is as I described...but it worked in my case.