Just did the coolant flush on our '04 at 100k and when I started it up for the first time it stayed cold for a minute then shot to full hot, even though I was sure it wasn't. I thought it was the sensor or thermostat so I bought both, and neither fixed it.
I put it all back together, reflushed and bled the system again, and took it for a test drive with my handy dandy laser thermometer to check the temp behind the thermostat after a drive. 5 minutes later it got to full temp and the needle settled back to the middle and it all seems to be running great.
From my understanding of my other OBD2 vehicles I know that after the computer sees the engine reach operating temp it tries to go into closed loop monitoring of the engine (the computer is actively adjusting the engine parameters instead of just running off of pre-programmed maps) and so it does a diagnostic to make sure everything is OK before it does. It seems that at that time it reset the gauge, since after tracing the wiring diagram in my Bentley manual I noticed that the gauge is driven by the DME.
I just wanted to share my experience in case it might help someone else in this situation. After it's all said and done I'm glad to have replaced the thermostat just for peace of mind.
