I put in a $5.00 NAPA 180* thermostat yesterday to replace the Mr. Gasket 160* stat I had installed at the time of the rebuild. (250 miles ago) I also drilled a 1/8" hole in the rim of the stat to allow air to escape. (My machine shop guy said it may help bleed air) The Mr. Gasket stat had a much smaller opening. I also allowed the engine to run for about 30 min. with the rad. cap off the try to purge the cooling system of air.
The end result- At highway speed, the engine runs at 180* or less. In the city, it runs hotter. I didn't do too much city driving, but while idling in the garage, it climbed to nearly 210* within about 10 min. before I shut it off. I guess I was happy with this result. I didn't lose any coolant in the process. I'm not sure the 160* stat was working properly, but I'm sure excess air in the system didn't help.
Before I changed the thermostat, I tried letting it run without the rad. cap. After 20 min., the coolant began to shoot out of the rad. in short bursts about 15 seconds apart. With the new stat, the coolant flowed normally.
I guess the next thing is to take some additional steps to correct cooling problem. I'm shopping for a fan shroud and probably a more modern radiator. The one in it now is about one year old, but it is the original style. The air conditioning condenser probably isn't helping things either.
Anyway, thanks for all your advice. I'm sure I'll get it under control eventually.