have so been thru the warm temp thing, but ours has downright blown the cap off the cooler liquid reservoir. steam and coolant everywhere. replaced the water pump, temp sensor, thermostat, radiator, radiator cap, lots of tubes, pipes, belts, clutch fan and shroud. still warm. findlays in las vegas told us we needed to replace the engine and gave us a quote. figured it had a crack somewhere in the block, but they couldn't find it and didn't show up on their wonderful, sophisticated computerized gizmo--which they felt was wrong. my husband felt the instrument panel didn't show us a correct temp. upon starting it almost immediately went to 260--but after replacing the radiator didn't blow the reservoir cap or boil over. he had them install an engine temp gauge. this little puppy is showing it at between 218-224 at which time the clutch fan is now engaging and reducing the temp. i thought the temp was still somewhat warm. his research seems to indicate a temp somewhere around 218 could be considered normal for our engine, a chevy workhorse w22. since your gauge is rather nebulous, i wonder if a separate engine gauge would tell you the real story. my DH says it's the best money he's spent.
wee3-gin, clyde & the bichon frise
2002 Forest River Windsong-34' Class A
Workhorse 8.1 W22 with Allison Tranny
1996 Geo Tracker-4WD--"Trudy"
2003 Minnie Winnie 30V - "The Frosty Hauler" (Class C)
May the Angels guide your wheels and ride on your shoulder.