I believe that JDUB is right on the money with his assessment of the problem.
I never saw a thermostat fail in this way until I began driving MB's. I've seen it happen twice. The first one was so bad that I froze until I replaced the thermostat. It was so bad, I got no heat from the heater. American thermostat failures that I've seen were the opposite, they would NOT open.
JDUB is also on the money about premature engine wear. Replace the thermostat as soon as practical.
JDUB, is your 5.0 Mustang one of the late '85's with the roller cam? I bought one new in April '85. The ones made after Dec '84 had the roller cam and the Holley. The car was a great one. The engines turned out to be a little dirty, and they were forced to go to the injection in '86 before they had the injection sytem opened up to take advantage of the rest of the engine, it choked some of the horsepower. You may already know this, but the production date is stamped in the sheet metal at the top of the door jamb on the passenger side. If it was built after Dec. '84, you have a rare gem.
[Edited by LarryBible on 12-22-2000 at 06:08 AM]