I am in the same state of confusion, Alvin.
The original 261 thermostat (on my 1960 261) was a special/original thermostat/housing (and an hard/impossible to find thermostat). It had a hole drilled it in.
I am now using a 235 thermostat housing and have never had over-heating problems (spikes to 195) with the 235 thermostat/housing or the old 261 housing/thermostat.
