I have the exact opposite issue with my temp gauge. It moves all the way to the right (hot) when I turn the key on, even before the engine is running and stays there. I've checked the engine temp and it is not at 230 degrees so I have an issue with my gauge, wiring or sending unit. I checked the wiring and the gauge is correctly wired (there is a resistor on the red/black wire that I soldered when I did the wiring but I didn't change it) and the red/black wire is fitted to the sensor on the other end.
The replacement sensor that I installed (in the right spot in the block) was an AirTex Wells 1T116 which is specified for a 72 cougar with a 351 Cleveland. This sensor cross references to the following part #s: 12336872, 2132767, C6DZ10884A, C6DZ10884B, D0OZ10884A, D0WY10884A, D0ZZ10884A, D9HZ10884A, D9TZ10884A, E1ZZ10884A, F1SZ10884A, F2CZ10884A, F3CZ10884A, TU25, ZZL018840, ZZM018510
I used teflon tape on the threads, maybe two wraps, and have not yet tried to take some off. Is the tape a potential problem in my case? Can I check by leaving the sensor installed and running a wire from its base to ground? Or do I just have the wrong sensor?