The temp sensor is located in the intake manifold right up front under the plastic cover. It will have a round connector. Is the engine coming up to temperature ~87C ? A bad thermostat that isn't allowing the temp to come up can cause a temp sensor code. Problems with the wiring harness also can cause fault codes for the temp sensor. Given that the temp sensor is the cheapest and easiest to replace I'd do it first. Buy the part before hand and you'll be sure to pull the right one out to replace it.

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90 300TE 4-M
Turbo 103, T3/T04E 50 trim
T04B cover .60 AR
Stage 3 turbine .63 AR
A2W I/C, 40 LB/HR
MS2E, 60-2 Direct Coil Control
3" Exh, AEM W/B O2
Underdrive Alt. and P/S Pulleys,
Vented Rear Discs, .034 Booster.
3.07 diffs 1st Gear Start

90 300CE 104.980
Milled & ported head, 10.3:1 compression
197° intake cam w/20° advancer
Tuned CIS ECU
4° ignition advance
PCS TCM2000, built 722.6
600W networked suction fan
Sportline sway bars
V8 rear subframe, Quaife ATB 3.06 diff