Ok, it sounds like you have done just about everything. What I want you to try is this. With the engine cold, open the radiator. You will need a radiator thermostat. Most parts stores will lend or rent them. Place the thermometer in the radiator and start the engine and allow it to warm up. Check to see if the thermometer and your temp gauge give you the same reading. If they don't, there is a problem with either the temp sending unit or the gauge itself.
If you have already tried this, let me know.
Saturday, July 25th, 2009 AT 9:49 PM