The cooling fan visco clutch locks up at about 100C (spec is 105, I think), so you should hear it cut in -- makes quite a roar. You can also check it by opening the hood when the temp guage is near 105 and having someone shut the engine off -- fan should stop in less than half a turn.

If it won't lock up, replace the visco clutch to prevent overheating.

I've not had the 300D long enough to see what the temp guage does in the heat -- repalced the thermostat last fall when it got cool. The 300 TE does exactly what your's does, although it tends to stay at 100 in heavy traffic with the AC on -- have a new visco clutch but haven't installed it yet.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!