According to my shop manual (I left out lots of details that didn't seem to apply to your situation):
1. Oil is picked up by oil pump through oil pan sump. A spring loaded relief valve in the pump limits the maximum system oil pressure.
2. Oil is pumped through filter,which has a bypass valve in case it gets clogged, and an anti-drainback valve to keep oil from flowing backwards into pan when engine is off.
3. From the filter, oil is pumped into the main oil gallery that runs the length of the block. Oil is pumped through the oil gallery to the main bearings, then to the camshaft bearings. Oil from the main gallery also directly feeds the hydraulic valve lifters.
4. Oil under reduced pressure is fed to the valve rocker arm assembly through a drilled passage in the cylinder block at the #4 camshaft bearing. The oil is metered by a groove in the camshaft journal. The passage in the block matches up with a slot/hole in the cylinder head (the head bolt hole at the left rear of the head)
5. The oil passage in the cylinder head is drilled from the cylinder head bolt bore to the number 6 valve rocker arm shaft support. The rocker arm shaft supports have square holes so the oil can pass by the round bolts to reach the rocker arms, shafts, and valves.
6. Oil from the rocker arms drains down the pushrods/holes and into the pushrod chamber and openings that lead back down through the block to the pan...
Since the oil pressure sender is near the back and at the midline of the block, I think it is measuring pressure in at the rear of the main oil gallery. I could be wrong though, it could be measuring pressure after it has passed through the metering groove in the camshaft and is on it's way to the top end. Either way, I think this gives you some other ideas where to check for oil pressure at. You could pull the left rear headbolt and see if oil comes out of the hole when you run it for a minute. Since I think the oil pressure gauge is measuring at the main oil gallery, I think you have some wide tolerances somewhere in the lower end that are leaking so much oil that there is no pressure left to drive things to the top, but it sounds like a cam that has broken in half would also cause upper end oiling problems (if the engine would even still run).