Yeah check that little banjo hose thing, that goes from the block to the head.

As for the green coolant, did you flush everything completely when you changed the thermostat? When I did mine I started by removing the thermostat, then I drained the radiator, after that I drained the block, and to finish I flushed everything I could with the hose (radiator, since I had the upper hose off because it needed replacing, and then through the thermostat housing, pretty much everywhere I could until it came out clear from the drain in the block)

After all this is ran at/slightly above 80*C, before it would barely get to 60*C since the t-stat was opening up too early. I'm still having some slight overheating at times, which I have suspected for a while is being caused by that little banjo tube.

Anyway, good luck figuring it all out!

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1982 300D Turbodiesel, daily driver. Mods so far: Fram 8038 paper filter, 4 brake light mod, Gen II w126 (front) rotors/calipers, boost turned up to 12lbs, non-egr manifolds, water/methanol injection, 4-speed manual
1980 300SD Turbodiesel, project car, nearly ready to hit the street

1974 240D, New paint