I know this thread is extremely old, however I am bringing it back to life because I am having the EXACT SAME problem with my 1995 Grand Cherokee, and I think I am on to something.

Borneo Batman, since you started the thread may I ask.....did you ever find a solution to your original problem? If so, please tell me because it's driving me nuts. However, if you didn't find one.....please let me know if your jeep has ANY the following....

i) Auxiliary Transmission Cooler. If so, was it stock or did somebody install it themselves?

ii) Towing Hitch. Again, if so, was it put in by the factory or did somebody else put it on?

iii) 3.73 Rear Differential

Please let me know about these three things. This will let me know if I should continue with my "theory" or not.

Burp the coolant system of air. Park it on an incline with the cap off and let it idle. Sometimes it helps to make a break in the heater core line and add a splicer. Good luck

whats your theory on all that anyways?

ololololllort

I think i'll leave that "theory" to myself because I already have somebody laughing at me. However (on a completely different subject) let me say this......Borneo Batman mentioned he changed the water pump.....any chance he could have forgotten to put the spring back in the lower radiator hose? With no spring in the hose, it will increase the flow rate of the coolant since there is less restriction in the hose. This could affect the way the thermostat operates.....especially one that isn't rated for "high flow." The reason I ask, is because now that I think I about it......there is no spring in my lower hose. When I changed my lower radiator hose for the first time on my Jeep, there was no spring in there at all. Somebody (the owner before me) must have got careless and took it out.

There's no spring in either of my lower hoses and I have no issues.

what kind of thermostat are you running?

No spring in mine either. Stock thermostat.

Factory.

Hey Spanovich 008, I've tried to just let it go and move on with my life. I think it's got to just be an over active gauge. I checked the heater output with a temp gauge and it DOES NOT fluctuate. I think when the t-stat opens the gauge wigs out over a grounding issue. I read on another forum of a guy that had this probelm start before doing any maintenance to the cooling system. I've been through 3 t-stats and now have a mopar 195 with a jiggle pin. I can't make it any more "right." I've tried checking temps with an IR gun, and there seems to be some descrpancy between the gun and the gauge. There is a 30 degree difference between the t-stat housing outflow and the temp prob. It's not really rocket science so I just let it go. I've been driving the jeep for over 3,000 miles now and everything seems fine and the heater has super high output and my mpg is around 21 hwy!

My theory is my gauge has been extra sensitive since I bought the jeep, but I never saw gauge fluctuations because the old t-stat I pulled out would not close all the way. Since the old t-stat never closed all the way the whole cooling system heated and pressurized as one unit. Now with these 3 t-stats I tried the head/block heated and pressurized then when the t-stat opened it lost heat and pressurization as the hot coolant moved into the top of the rad. This heat/press lose is shown by the gauge wigging out and dropping to 160, but I never actually measured a temp that low with an IR gun (lowest I ever measured was 175). That's my theory.

To answer your question I have factory, tranny cooler, tow package, and 43225 is stamped on my read dif cover (I know it's an open dif because I've had the cover off to change the oil). Anyway, hope that helps, or you can just let it go. Yeah it's annoying, but I don't think it's actually making a temp swing that big so I've just tried to ignore it. More importantly is the thing doesn't overheat in the summer!