My motor came with an Allison optical ignition (late '70s vintage). The tach was not happy with it. It caused it to bounce pretty erratically above 3000 rpm or so. One day it quit on me in the left lane of the Interstate so I replaced it with a Pertronix unit. The tach is MUCH happier now. The needle is very stable now. Given the age, I think that my ignition was probably using an incandescent bulb and I suspect that the bulb burnt out. Lumenition is not Allison and yours may be newer and may be using an LED which should be very reliable but given my unsatisfactory experience with my optical ignition, I would shy away from them. Now that my tach works, I am really high on Pertronix! Note that if you decide to switch to Pertronix, you need to use resistor wires or plug connectors.
Somebody here mentioned a mod of some kind for the tach (I think to use with a Pertronix!). I am using the stock ignition wiring (other than the fact that I have added an electronic rev limiter and electronic electric fuel pump shut off (I don't think either of these has any effect on the operation of the tach and the ignition) and I have hooked up the tach exactly like as it was originally. I can't explain why I have no problem with Pertronix and my tach as some have.
You have a couple of options:
1. Search this forum and the lotuseuropa yahoo group (you should join that too) to see if there are any mods that might fix your problem and try it.
3. You could have your tach checked out. Since it sounds like you've never seen it working - it may be busted. The place that checks it out may have suggestions on how to make your tach and Lumenition play nice together.
3. Replace the Lumenition with a Pertronix ignition and see what happens. If it doesn't help, try mods that others have used for Pertronix ignitions. If that doesn't help, try #2 (for Pertronix).
I hope that helps!