That's the little 2" piece, right?

Do you think it is the housing gasket rather than the thermostat gasket?

Edit: I see now - it is definitely the housing gasket - there is no gasket there - just some black goop.

So should I replace the water pump, too?

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Current Mercedes
1979 maple yellow 240D 4-speed

Gone and fondly remembered:
1980 orient red 240D 4-speed

Gone and NOT fondly remembered:
1982 Chna Blue 300TD

Other car in the stable:
2013 VW Jetta Sportwagen TDI / 6-speed MT