I have a 85 300d and the other day the heater stopped working at hwy speeds. It would come back on as soon as I slowed to say 30 mph. I thought it was the thermostat and I replaced the old one. Now it still has no heat t hwy speeds and also now coolant temp gets pretty hot unless I'm in the throttle. Like at a stop light it gets up pretty high and as soon as I hit the throttle the temp instantly drops. What gives?

1) Check monovalve to see about heater
2) Is the system cleared of air, and/or is the temp sensor wire firmly attached? An "instant" drop in temp shouldn't happen based on cooling the engine down, but may indicate a gauge/sensor issue. If it wasn't that way before and the only change was a thermostat then it could be air in the system, or an inproperly installed t-stat.

For better advice try to be a bit more precise: what does "heater stopped working" mean? The blower runs, but air is cool; the blower stops; etc. What is the pushbutton setting and fan button?

What is the temp on the gauge as "pretty high"? Near the read @ 120? The middle mark @ 100? Where does it stay normally? What's the ambient outside?

following your response, I'm not sure if the system is cleared of air, how would one know if there was air in the system and remove it?

When I say the heater stopped working, I meant at hwy speeds it started blowing cold air. Now it blows hot at all times but still the system runs hotter than its regular temps. Normal temp is right at 80 and now it will jump to almost 110 at times. Ambient temps were in the low 70s that day.

The system is supposed to be self-bleeding through a vent hole in the thermostat housing. If you installed the thermostat correctly there may have been a small arrow at the top to indicate the place for the vent hole.

Assuming this was done, with the car cool, park it with the nose uphill, remove the radiator cap and run the car at a higher idle until it warms up, turn the heater on to full. This may help if there's trapped air.

Your heater issue may be related to the temperature, or not. It sounds like now it's working OK, though? Or does "hot at all times" mean now you can't regulate it?

Running hot and getting warmer at a stop may mean the fan clutch. Particularly if blipping the throttle and upping the engine speed causes the temps to drop. But how fast is "instantly"? That's got me confused. Does the needle swing, or gradually go down? Instant swings on a temp gauge don't sound like a temperature issue.