The reading is accurate. I switched both gauges and sending units between trucks and confirmed it. The thermostat was from the local ford dealer, and like I said was tested before it was put in and opened up at the correct temp. Hell, I even tested the old one which was a motocraft unit I put in last october and it tested fine. After a 15 mile highway run today in 80 degree weather, I popped the hood when I got home and opened the cap. There was pressure, but the coolant wasnt nearly hot enough, it actually felt like 130 degree water, and yes I did stick my finger in it. The radiator wasnt all that warm either, I could rest my hand on the top and it was just warm to the touch. My other truck, when at full temp, you cant do that so there is a definite difference. If it were a circulation issue, wouldnt that cause it to overheat? On another note, I did a full flush of the system when I replaced the t-stat, and water came out just fine of the petcock on the radiator, as well as the drain plugs on the block.
Its strange to me that the truck was running at a normal temp, then would run around 160 consistently for a few months, and now is cooler than that. I suppose I could try and find a laser thermometer in time just to see whats the hot spots on the motor, but nothing seems to be unreasonably hot on the block.