A couple of things come to my mind:
1) Are you sure of the timing marks really being TDC when indicated. A LOT of over-heating issues can be traced back to the wrong ignition timing.
I'm confident my balancer is reading correctly. What would cause the overheating problem, too little or too much timing? My current timing is set 20/34 with no vac advance.
2) Are you sure of the temp gauge? Just because it's a name brand doesn't mean it's right. Buy a real temperature gauge from some place like mcmaster.com, where the % error is specified, and compare it's readings to your gauge.
Either it's the location in the manifold or the gauge, but it reads about 2 degrees cool. All I know is if it reads above 225 I'm looking for a place to pull over.
3a) I know that it sounds like the wrong direction, but what happens if you go to a higher temp t-stat? More than once I've seen this move cure the problem.
No, I haven't but it may be worth a shot. I see where the logic could work though.
3b) High flow or std flow t-stat? If high flow, dump it. Go with the std flow version. The std. flow t-stat is a bigger restriction, which is what you want, it will raise the coolant pressure in the block above the cap value which makes it harder for the coolant to boil in the localized hot spots. Once the coolant has changed to steam it's a lot, lot harder to cool the engine.
Standard flow
3c) While you're messing with t-stats, are you drilling a small hole in it/them to bleed air out while filling the system? If not, do so. 1/8" or smaller. On engines where I can I rotate the t-stat to put the hole as high as I can get.
Yes
4) The radiator cap absolutely has to be at the highest point in the system. '60's era Corvettes had surge tanks due to having a cooling system layout very similar to yours. Strongly suggest putting a very high pressure cap on the radiator, putting a surge tank in the hot side heater core hose, and placing the tank in the engine bay where it's cap will be higher than any other part of the coolant system.
Also: If you can figure out a way to do it, modify the cap on the radiator to allow coolant into the overflow hose bib on the radiator's neck. Route a hose from there over to the top of the surge tank. This will make the system self-bleeding. 80's era VW Rabbits are one potential JY donor for the surge tank and there's likely others as well.
The cap is located higher than cylinder heads with a line going to an overflow tank. I originally didn't do this and it made a noticeable improvement.
5) Water pump; how new is it, and where did it come from? I once had an over-heating problem with a car that had *just* had it's pump replaced before I bought it. I tried everything and the last thing left was the pump. I put a Stewart Components water pump on it and the problem went away. I've since quit buying electrical or cooling system parts from the national chain stores. In the long run they don't save you money or time.
Pump was new last year when I revamped the cooling system, it is a standard repacement from Autozone.