Mine just started doing it after coming home from the track last night and it bounces over a range of about 2-3 psi. Its never done this before. Im not running an isolater; its straight off the fuel rail. Is this a sign my regulator is going bad? I've never replaced it since I've owned the car in 2000. I've heard that if I take off the vacuum line and smell fuel that the diaphragm is bad.

Yeah if you have any fuel on the vaccume side of the regulator its bad. A little fluctuation should be fine but if you notice the car surging with it it's a real problem.