The engine needle exceeds the hot point after a very short time

In the most general of terms a diesel engine would operate at 86-92 C.

However, much depends on the distance you are driving. On a very short trip(s) your needle is unlikely to get much above cold on the gauge. That's because an engine needs a minimum of 5 miles before the thermostat begins to open to allow coolant to circulate, and 10 miles before your engine is getting to 'normal operating temperature'.

The ideal position of the needle is N - normal ... midway between cold and hot.

If, on a long run, the needle doesn't get much past the cold mark it's probably due to either a faulty coolant sensor temperature sending a wrong reading to the gauge, or a thermostat which is stuck in the open position.

If the needle is indicating too hot - again it could be a faulty temperature sensor, a faulty thermostat - or other problems.

With a fully warmed engine and sitting in traffic/idling your needle would creep from Normal to Hot .. and then the electric fan would kick in.

if you want to check timing,, place timing mark to 0 and remove distributor cap look if rotor point to number 1 cylinder if not timing belt problem

hope it helps

check that the wire to the temp sender unit has not fallen off and is shorting out on the head/block. The power comes from the ignition switch through the gauge down to the sender unit and because the sender is a temperature controlled resistance unit the voltage is very low and so the gauge reads cold . as the temperature heats up , the resistance is decreased and so the voltage is increased though the gauge and the needle reads higher.. Hench if the gauge goes directly to hot on start up the wire is shorting out or the sender unit is faulty.

I would suspect the needle valve and seat in the carburetor bowl is sticking open thus allow fuel to flow into the intake which is flooding the engine.

From your explanation it seems you are not loosing coolant so I would rule out a head gasket at this point. I would however check the "new" thermostat. Remove the thermostat and put in pot of water. Use a thermometer that will read the boiling point of water (212F 100C). Heat water and whatch that thermostat opens at its designed temperater. You can also see if the thermostat is opening by removing the rad cap when eng cold - start you eng and see if the coolant flows in the rad before the dummy light comes on. If the coolant does not flow your thermostat is stuck or improperly installed. Also be sure that your rad cap is of the proper number of LB rating for your vehice. The steam from your exhaust is normal at cold start up - it is simply condensation evaporating. That is how you can tell if a person has not let their vehicle warm up. If you follow them it will stop after vehicle reaches operating temp. Please let me know if this helps.

I was told numerous times by the Lincoln Mercury mechanics that the car just "runs" hot.

check the sensor on the front of the engine ,by the water pump.i It will usually have a single little plug on it

Start by pulling the OBD 2 Codes( On Board Diagnostics)

they are designed not to fluctuate with engine temp and are kept stable once operating temp is reached. only if the temp exceeds a set mark will the needle rise to indicate overheating,

Your fan relay needs replacing.