Mercruiser question - Temperature problem

[oldfielder]

Did you pull the end caps off of the exchanger and look for crap in there. It sounds like there may be stuff in there causing a restriction and as your demand increases perhaps the h2o flow just isn't there. when was the last check of the raw water pumps impeller?
What about a gauge that gives you temp instead of high/low/just right?
165 sounds like where it should be.
Also, when you jumped out the harness, did you also jump out the ground? If that wire has some corrosion, could the extra resistance be messing with the sensitivity of the gauge.