I had the same problem. New thermostat and two the expansion tank caps later, the operating temperature is much more consistent.

I bought the 1.2 bar cap first but it did not seem to work well - thus switching to 1.4 bar one (superceded replacement part)

Frank.

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'86 560SEL | Silver Ext. / Blue Int. | 201K miles (Apr. 05) | 204K miles (Feb. 06)