PMC 351 water temp, gauge problem?

Running it under load in real life conditions will tell you a lot more than idling with no load in the driveway.

You don't mention under what conditions the temperature creeps up or what conditions bring the temperature back down, which could help to figure things out.

Like for example, does it creep up at slow speeds and come down when you speed up some?  if that's a Yes, then you might have an air leak on the suction side of the raw water pump somewhere between the pump and the raw water intake.  

Also your raw water pump impeller can cause some funny swings in temperature, have you looked at the impeller at all?

Your gauge and the sending unit need to be matched. If for example your gauge is 100 to 220 degrees, you need a sending unit for the same 100 to 220 degrees or the readings will be out of whack.

I'd stick with a 143 thermostat and if it runs at 160 ish don't be surprised.

You could check the resistance of your sending unit with a multimeter, but you'd need some values from the manufacturer to compare those numbers to.

If you don't know the answers to some of those questions, it gives you something to look at when you run it on the weekend 

On my '87 Martinique, PCM 351, raw water cooled. I bought it two months ago and was having intermittent cooling issues where the temp on the gauge would creep up past 180-190°, light would come on the dash for a few seconds (i think the buzzer is dead or unwired), then the temp would drop right back down to around 160°. I attributed it to a sticky thermostat and replaced with with a 143° unit from Skidim. When I ran it again in the driveway from a bucket, the temp gauge now barely goes above 100°, maybe 120° tops. I took out the (new) thermostat and checked it on the stove and it starts opening right around 140°-ish. Haven't checked the old one but still have it on the bench, guess I should check that one too. The temp gauge itself is not-original, is VDO, and was replaced by previous owner. I do know I'm having the typical issues with power/ground where the gauges all jump when I turn on add'l items like lights or blower so I guess the accuracy is suspect from the start, but the relative difference is what has me concerned.

I've checked the temp the best I can with an IR handheld on top of the manifold (130-150°) and right at the temp sender (130-145°) and under the thermostat in the housing (~150°). Top of the t-stat housing stays just under 90° and the manifold risers are about a steady 100°. That all seems pretty appropriate.

So now I'm wondering if the gauge is accurate and how hot it was really getting before I changed the thermostat. The oil looks great and still nice and clear amber. I'll get it on the lake this weekend and see how it does while running. 

Is there anything I should test with a volt meter? Anything else I should check on the engine or gauge itself? How do I determine if its an automotive vs marine gauge (I think I read that they have different voltage ranges)? Any other thoughts or advice? Should I stick with the 160° rather than 143° t-stat? I run on fresh water river/reservoir only in Tennessee.

Thanks in advance!