I also recently went through the same issue. My temp gauge wasnt reading at all. I replaced the sending unit and it was just pegging out at over 260. I ended up switching out the sending unit for another (different brand) and now it reads one hash over 210. The weird thing is that if I just leave the engine running parked on the drive way the temp will climb up to about 260, the engine still runs smooth, the top radiator hose stays cold, I'll drive it once around the block and its like the thermostat finally opens and the gauge shows about 210 while driving. I,ll get out and feel the top radiator hose and its warm to the touch. If I stop too long while driving the temp will climb up again to the red zone.
I've replaced the radiator, therm, sending unit, burped the system and ensured that there are no leaks and that the coolant is topped off. I really want to fix this issue so i dont have any worries when on the trail. The only thing that i havent messed with is the water pump. Could that be an issue?