Temperature measurement in ship

The hull is at a different electrical potential with respect to the thermocouple inputs' ground reference and following the laws of physics, current flows in a loop between the two different potentials in what is called a ground loop.

The device reading the thermocouple signals did not have sufficient isolation from the ship's hull (ground). The ground loop voltage drop far exceeded the T/C signal, and was of the opposite polarity, driving the indicated signal negative.

When the T/C was hanging in the air it was 'floating'. When touched to the hull, it was put at the potential of the hull, with respect to AI ground.

It sounds like replacing the indicator solved the problem. The analog input on the device could have been electrically damaged.

A standard approach when encountering thermocouple ground loops is to use "ungrounded" thermocouple assemblies, which are assembled so that the sensor element does not contact the sheath/case/tube, effectively isolating the T/C from any potential of whatever its sheath contacts. Sometimes ungrounded T/Cs are replaced with look-alike grounded T/Cs at which point ground loops evidence themselves. Ungrounded T/c's have a slower thermal response because any heat transfer is through the insulating material.