Lugnutz, lets forget about the heater bypass for a while. Lets talk about gauge and sender accuracy. You don't need a thermometer of any kind to test. You put the sender in water on the stove, don't let it touch the bottom of pan. Hook up the gauge to it. When the water boils, as in: bubbles-a-crazy starts, see what the gauge reads. Check online charts that tell what temp water boils at your altitude. Water boils at 212 deg only at or near sea level. Then you can see how to figure what a reading of 160 or any reading on your gauge, actually is, because you know how many degrees the gauge/sender are off.
I don't know if you have an electrical or mechanical sender.
