I have no idea why the FSM says to leave the filler cap off until around 60 C, but it does.

I highly doubt that the problem is trapped air bubbles, but its the easiest thing to check (and its free). Since the block was never drained when you replaced the radiator, you don't need to worry about the alternative ways to fill the block. And again, the coolant system is a self bleeding system, as per the FSM you can fill it from the filler cap, leave the cap off, turn on the defrost button, run the car at intermittent speeds up to operating temps, recheck the coolant level below 90 C and you're done.

I have drained and refilled the coolant on my 84 300TD turbo probably 8 times this summer while trying to trouble shoot the cooling system. At least 4 times I drained the whole block. No special burping method was ever required (though I tried several).

You got the front to back orientation of the thermostat right (foot plate towards the back of the car) and the o-ring (it really only can go in one way). But there is a small arrow stamped on the main body of the thermostat that should point up, like this :

I don't know why it would possibly matter, but the arrow is there and all the repair manuals mention it.

Lance,

I would bet my eye teeth that its the thermostat. I know, I know. It sounds crazy that some simple little piece of metal could cause so much trouble. Besides, its a brand new OEM part.

I did citric acid flushes, pulled the radiator twice to clean it inside and out, tried 4 different "burping" methods, replaced the radiator, swapped the filler cap, swapped the fan clutch, pulled the waterpump to see if the impeller had worn down, and even tested the thermostat in boiling water by itself and while mounted in the thermostat housing.

It turned out that I had TWO bad thermostats in a row, one that came with the car and one brand new Behr. It wasn't until I swapped out the old one from my 85 300TD that my temps dropped from 100 C to 90 C. More importantly, the temps on the 85 300TD went from 90 C to 100 C by doing nothing more than installing that same brand new Behr thermostat.

Rant over.