Configuring INA126 Instrumentation Amplifier for Data Acquisition
I don't really see a reason for this not to work the way you expect with the connections you have listed here. Might I suggest some debugging steps?

1) See what happens to the output range when you put a large-ish Rg ( say 27k ohms) in the circuit. Does the output swing change at all?
2) Have you checked the inputs to make sure they are as you expect with the amplifier connected? If so, how about using a larger resistance POT to simulate your resistor divider just to remove the sensor from the picture until you get the circuit working.
3) Perhaps the simplest explaination might be that the INA126 itself is bad. Do you have a spare you can drop in to test?