Well after two trips when the coolant light didn't come on at all (except when first turning the key of course), it has started playing up again. Same thing as before - comes on after about 20 mins of highway driving and goes off once you slow down like when you exit onto city streets.

When I got home I had the trouble-and-strife (wife) rev the engine to about 2000-3000rpm while I watched the coolant tank. Sure enough the level kept dropping until it was about an inch from the bottom. Once she backed off it rose back to normal. It looks like the level sensor is working fine and doing its job.

I'm starting to agree with 'Jim H' about trapped air, although I don't understand why this has suddenly appeared as a problem. The only related things are that now the colder weather is here I am using the Block Heater most nights and have the heater position on the ACC when driving.

Maybe there was air trapped in the heater core or could the Block Heater cause air bubbles to form? What is the best way to bleed out this air?