If like you said, the temp bulb is in the back of the head and not quite fully incased in the coolant, then it no surprise the gauge reads hotter then the actual coolant temp is. Flow is likely slower that far from the water pump, and most all engines are hotter at the rear then the front due to the slower coolant flow. Move the probe up under the thermostat and it should read a truer temperature. The exhaust manifold also radiates a ton of heat which could heat up the temp bulb.
