This circuit is just a milliammeter with a thermistor mounted outside the licence plate. A thermistor is a resistor deliberately designed to be temperature sensitive. The one on the licence plate is supposed to get lower resistance with higher temperatures. Sounds like yours is shorted - no resistance, therefore really hot indication (max current).

Why do I know something about this? My needle wouldn't move off of about 72 degrees. The thermistors can, and do, go bad. For $50-60, you can get a cable assembly with the thermistor on the end. The licence plate part is easy. The wiring part is a PITA. Some people cut off the bad thermistor, cut up their brand new assembly, and solder the new thermistor part on the old cable assy so that they don't have to replace all the wiring to the gauge.

Thermistors all have different resistances at a given temperature AND sensitivity curves. I tried to solder on one from radio shack but it was clearly not right in either resistance at a given temperature. So I bought a bunch of different types from an electroncs supply place. I found two wired in parallel that together SEEM to be fairly accurate between 70-95 degrees. I don't know how it will do in colder temperatures but I will find out! If I succeed, this will be a lot cheaper than the MB part!