[Barnsnake]

I'd bet the lack of a bypass is exactly your problem.

Without the bypass there is no circulation within the engine when the thermostat is closed. In that case, you can have boiling water/steam in the heads while the water near the thermostat (and temp sender) is still relatively cool. Once the heat gradually migrates into the intake manifold the thermostat opens and you get a scalding blast past the temperature sender. The water then circulates through the radiator and everything cools down. The thermostat closes and the cycle repeats.

Turning on the heater provides an alternate bypass.

Add a bypass hose. Soon!

Jim