That Mustang pulley really cooled the '59 Fairlane 292 off but now I'm concerned that it's too cool.  Temp gauge plumbed into back of head says 155-ish, small one in the Thermostat housing says 165 while driving and idling after a 40 minute highway ride.  I'm wondering if the bypass isn't allowing the water to get warm enough to open the thermostat.  Also wondering if there is a thermostat in there.  

My plan is to pick up a 180 degree thermostat and put that in whenever I get around to it- winter time if I can wait that long.  Trying to enjoy this while I can.  

When you guys restrict that bypass to 3/16"- what do you use to make that restrictor?  Just a stainless rod?  What diameter?

I'm just worried my oil isn't getting warm enough to evaporate the moisture.  I have a temperature gun on the way so I can check it- not sure how to really do that, though or even what temperature is for oil in a non-PCV engine.  

Thanks.  

Start with the thermostat. The infrared guns are not necessarily accurate. Your temperature gauge is not necessarily accurate. Ted (Eaton) has drilled and tapped the thermostat housing for temp sender, being that the location provides a more accurate reading. You could do that and connect it to a quality aftermarket gauge, while retaining your OEM gauge as well.