I had problems with the wiring and the thermostat on my 85 Turbo. The thermostat is quite easy to change on your engine. As John Sargent said, it makes sense to change that first because it does not cost much, and probably needs changing anyhow if it's never been changed. My was broken half way off, if the other side broke off it would have gone into the engine. My engine was running cold with it stuck open. I had a 92 C thermostat, but I replaced it with an 87 C one because I live in a warm climate. Don't forget to get a new rubber seal. I was able to drain some engine coolant by sticking a small tube down the drain hose in the reservoir. I pumped it out with a small hand pump. Then when done I just poured it back in. (my coolant had just been changed). That makes the job super easy, clean and fast.

My sensor wire had no insulation at all for about 3 inches - just bare copper. As I recall it's yellow or yellow/white. Anyhow it comes up in the cable bundle next to the power steering reservoir. I clipped the wire and pulled it out and used cable ties to run a new one to the sensor. I just crimped the end with a crimp tool and used a bullet crimp to splice the two wires together. Temp works great now.

The temp. sensor (dash gauge) is right at the front/under the intake manifold. Its right near the knock sensor... just follow the wiring and you'll see it.

The temperature sender (ECT sensor) is located under and between the back two intake runners. You can just barely see it if you look down from the top. Its tough to access with teh intake manifold in, but you can push your hands through from the back and front. Be careful you don't damage the other wires in there when your working.

good luck,
rt