I think my next step is going to be to remove that casting and boil it out in some dilute citric acid to get anything and everything in that port cleaned out. I know the water pump is working, the radiator doesn't have any symptoms of being blocked, and the thermostat is new.

It just reeks of an airlock to me and I keep focusing on that burp port as my culprit. Since that thermostat sits up on top of the engine, and the block is higher than the radiator, it seems logical (to me anyway) that if that port is blocked up with scale or something that the thermostat will be airbound.

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Current stable:
1995 E320 157K (Nancy)
1983 500SL 125K (SLoL)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)

Gone and wanting to forget:
1985 524TD 167K (TotalDumpster™) [Definitely NOT a Benz]