Is the thermostat facing the proper direction? I know in my 88 it is easy to put it in backwards. Trouble is, I can't recall how to orient it for you so let's hear from someone who can recall which way the bridge-like piece should face. Easy to R&R as there should be a black rubber "O" washer with flat edges that can be reused, no paper gasket or Permatex required. Also, you replaced the sensor; did you check the spade clip and wire to see that they have a strong connection and are not grounding out against something? The insulation on the spade cip is usually the first thing to go.

If it is showing hot, turn on the inside heat and see if the gauge drops. If it does then maybe your rad is clogging of your fan clutch is defective.

Defective fan clutches reveal themselves in slow traffic when there isn't enough air flow through the rad to cool things off.

Take a look at your rad (remove grill). Press the lower corrugations and see if they crumble from corrosion.
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1980 245 Canadian B21A with SU carb but electronic ignition and M46 trans in Brampton, Ont.

My radiator has gradually clogged a couple of time in 20+ years. It usually did it in the winter and the gauge would start showing hotter than normal until it finally reached the red.
Have you added any stop leak to the coolant. It will aggravate a nearly clogged radiator. The air coming through the radiator will not feel hot and the fan will not increase speed to assist cooling in that situation.
Larry
I had a instrument cluster connection problem that showed hot temp gauge + oil light on with my 75 244 once.

Hello,

I own a 1977 200, The cluster is original, and I find that the gauge will read low or not at all.

A shorted wire will cause the gauge to peg.

These clusters do not have a compensator board.

I am in the process of fitting a gas thermometer up to the engine block coolant drain port. It is a 3.8" iron pipe thread. You should be able to fit an aftermarket gauge up to the port. Autozone sells them and they shouldn't be too expensive. You really should make sure that the engine is not cooking. They also sell laser thermometers that you just point and click at Autozone. They sell those for about $30. You can then measure the cylinder head temperature.

Correct temperature is ~190 F

Please post any questions

Goatman