Just because the t-stat you put in there fits does not mean that it is correct for that 261 housing.
It is my understanding that the correct t-stat (hard to find), is dual action. When it opens up to allow the radiator to cool the engine, it closes off flow to the bypass system.
I am guessing that your current t-stat is allowing the coolant to recirculate through the bypass and back to the block, rather than making its way to the radiator.


1952 5-window - return to "as built" condition | 1950 3100 with a 235 and a T-5 transmission