Ron, it sounds like you have a coolant circulation problem, not a temperature control problem. The suction blower in my late '85 stopped turning and I'd ROAST until the cabin heated up the sensor and turned the heat down.
Since you've checked the sensor and the monovalve, that probably leaves the circulation pump. The rest of the gang here can probably give you the hot tip on checking and replacing it.
I'd replace it, because your 300SD isn't even broken in yet and you'll have it around for quite a while to enjoy the heat. Good luck.
BTW, I STILL miss the old '85!