One thing about the Thermostat that I have to agree is that yes I replaced my broken thermostat (half open) with a dealer supplied wahler 80C T-stat and it didn't open when it should. So I went to Autozone (a convenient walking distance from my apt.) and replaced it again.. now it runs great.
I thought my Radiator for $300 was expensive.. I can't believe that yours costs a whoppin $800 (from Fastlane..)... damn..
If the rest of the car is great though I'd go with a new radiator...
sorry I can't be of more help..
Good luck! Keep these 116's running!
2008 BMW 335i Coupe