I have a similar issue on a mkII with a Universal M35B Engine.
I've recently replaced the temp sender with a new one from Catalina Direct, when that didn't fix the problem (gauage stating the temp was >240'), I found and read through this thread.
Today I ran a new S wire direct from the new sender to the gauge and the gauge still showed >240'F.
A couple of other points. With the S wire disconnected, the gauge pins low. As soon as the gauge is reconnected with a warm engine the gauge pins hot. When starting from cold, that gauge reads low, but quickly shows increasing temperature until it is pinned hot.
Looking at the new sender I realized that I used teflon tape to ensure no leaks at the thermostat, so I removed it, wire brushed it, reinstalled it and still the gauge reads <240'F. Am I correct that if the sender isn't grounding to the engine (teflon tape), I would get a high temp reading?
I've recently replaced the temp sender with a new one from Catalina Direct, when that didn't fix the problem (gauage stating the temp was >240'), I found and read through this thread.
Today I ran a new S wire direct from the new sender to the gauge and the gauge still showed >240'F.
A couple of other points. With the S wire disconnected, the gauge pins low. As soon as the gauge is reconnected with a warm engine the gauge pins hot. When starting from cold, that gauge reads low, but quickly shows increasing temperature until it is pinned hot.
Looking at the new sender I realized that I used teflon tape to ensure no leaks at the thermostat, so I removed it, wire brushed it, reinstalled it and still the gauge reads <240'F. Am I correct that if the sender isn't grounding to the engine (teflon tape), I would get a high temp reading?