Well, here's a small update.... I pulled the t-stat because I wanted to be 100% sure it was opening. I took it and put both the new thermostat and the old thermostat in a pot of boiling water. Both t-stats opened up, the older one oened up more than the newer one actually. I drilled two small holes in the older on on opposite sides and reinstalled it. I verified the thermostat opening by pulling the hose and checking coolant flow both when hot and when up to operating temp.
I stuck two thermometers in the coolant outlet just below the thermostat, they both read 200* (which seems about right since the both t-stats are 195*)

After the engine cooled down for a bit the water backwashed into the system, this concerned me at first, but since the system was open, it makes perfect sense.

This is what my Euro runs at, I've never see it get higher. I'm also not willing to pull the t-stat and see what temp it is - because I don't want to go through the nightmare I'm going through with the '92. There seems to be no air in the coolant system in the Euro, and I'd like to keep it that way.

Since putting the original t-stat back in and driving the car a bunch, the temperature gauge is still staying steady. No overheating problems and thermostat seems to be opening. Only issue is, that the thing is still eating coolant. I don't know what's causing it ti eat coolant only when the thermostat is in there... I want put the proper 50/50 mix of antifreeze and water in there, but if it's just going to eat it all - that's kinda expensive. I don't see water leaking anywhere when the car is running, and it's not blowing anything onto the windshield. I don't think it's burning it because the exhaust doesn't smoke excessively and there's no coolant in the oil...