89 300E overheating

[JAlex]

Hi Board i'm sure somebody here knows exactly my delimma. She is overheating, it just started for no reason yesterday. I immediatly shut off my A/C opened all my windows and turned on my heater (per emergency checklist) and looked for a safe place to land. Initial inspecion the engine had water although it was slightly low (added water and cooled radiator), belt ok. Restarted car to no avail. Let her sit till she cooled and drove her away. Heres the confusing part........everything seemed ok so i went to take her home and she starts climbing again noting no heat coming out of the heater vents, then this burbling sound and she starts cooling down and the heater inside starts blowing warm air. So thats the pattern for 20 miles home engine heating up with cold air from the heater vents then when she get to about 120C a burbling sound and warm air from the vents and she cools down to 90C. I figure this is thermostat. New thermostat and it still overheats. Is there another component such as a heater diverter that could cause this same symptom or could the blade on the water pump possibly be spinning on the shaft intermittently.
BTW no water in oil and water pump changed 80k ago
Your help is greatly appreciated, thanks
Alex