I looked briefly at the first two answers, Randy and Aye Roll.

Both of them are exactly what I'd say as well; the temperature compensating board part of the temp gauge is most likely faulty. The easiest way to find out is to give the instrument cluster a sharp tap right near the temperature gauge. Tap the cluster itself, not the dashboard that overhangs the cluster because the dash is padded and won't transfer the bump.

Usually, that causes a marked change within a minute or two. Generally it will either go way down, or it will level itself at the car's actual temperature. Don't get carried away, though--if it works once or twice, you've diagnosed a bad temperature circuit board. If it doesn't work, there MIGHT be a cause elsewhere, but it still sounds like a classic case of "tried everything and it STILL overheats. Don't beat up the cluster--get the circuit board replaced. (I once broke a temp gauge when it spiked with a bogus overheat, because I really banged on it.)

The most common cause of 'overheating' is the temp board. We had a whole bag of new circuit boards at the shop, for exactly that reason. Not only that, most of the cars on the dealer's lot needed it too.
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Chris Herbst, near Chicago.

You really should have the compensating board removed completely. It is not necessary and is the cause of a lot of problems as they age. It is a very easy task to remove it and jumper the pins. Why not print out the image below and take it to your mechanic and have him remove the board?

Randy

Hi Kathleen-
Every year when the weather gets warmer, I see complaints about 240 temp gauges creeping into the red. The problem is usually- I'd say 75% of the time- the temperature compensation circuit board in the instrument cluster. There's nothign wrong under the hood, the car isn't really overheating... it just makes you think that it is.

The only possible other item I can suggest, since it sounds like you've ruled out EVERYTHING else, is that there *could* be a lot of crud- leaf debris, dirt, whatever- in the air conditioning condenser. This is the silver radiator-like thing that's in front of your real radiator. It's what you see when you look in through the grille. If you shine a strong light through it (easiest when it's dark out) you should immediately see if there is any blockage to air flow there. If that's OK, and as you said, you've got a new radiator, fan clutch, waterpump and thermostat, then I'd say it MUST be the gauge.
The mechanic may not be familiar with this little circuit board- it looks a bit like RAM for a computer. Replacing it requires removing the instrument cluster and opening up the back of it. All in all, a pretty easy job, done in the car and shouldn't take more than 1 hour or so. The price of the circuit board ranges from $30 (FCP Groton) to about $70 (Volvo dealer).
Sometimes these gauges suffer from simply a poor connection- honestly, it may take nothing more than a whack on the top of the dash to make it behave for the rest of the week. Sounds silly but try it next time it goes up high- if it changes, it's undoubtedly in the gauge.
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Rob Bareiss, New London CT ::: '86 244DL- 215K, 87 244DL- 230K, 88 744GLE- 198K, 91 244 180K