Temp Gauge swings toward high-side and back to norm with 3 sec

If the "points" stick closed in the factory voltage limiter. The gauges that are powered by the limiter will swing to right and peg. Your gauge supply voltage has now gone to a full 12 volts. This can quickly damage the gauges if it remains there.
I have played with these dash voltage limiters on the bench before using a DC power supply and a Fluke digital VOM with a peak/ averaging feature . When they are powered up they put out 12 volts. Then the points open and the voltage to the gauges drops to zero. Then the points start to close and open very quickly over and over. This produces a 0 volt to 12 volt square wave. I have found that you end up with about a 4 volt average signal powering the gauges.