The temperature gauge needle moves to the second tick mark and fluctuates up and down, therefore I need a thermostat replacement. My question is the following:

If the thermostat has a problem (it is 25F outside) will this cause the engine error code of 116? 116 points to the engine temperature sensor. I noticed that the temp gauge rapidly rose from the second to seventh tick mark before the engine check light came on. Does the engine temperature sensor needs to be replaced or did the bad thermostat cause the sensor to register a bad reading?


Note: I reset the engine check light and one day later the same thing happen: the engine check light came on again. At the traffic light, I made a very sharp left turn and there was a rapid rise in the temp gauge from the second to the seventh tick mark before settling at third mark. Then the engine check light appeared again.


Thanks

My thermostat recently failed in my 98 S70 but I did not
see the check engine light (I did not scan for codes).
I drove it like this for about two months (it would just
run cold). If you replace the sensor you might as well
do the thermostat since they seem to fail around 60 to 70K
miles and are not that expensive.

I finally replaced the thermostat but did not replace the sensor.
http://volvospeed.com/bay13.htm has the instructions to
replace it yourself (note their warning about not dropping the
rearward torx screw -- I did and it is a pain to fish it out).

Sounds like it could be related. Why don't you fix the thermostat, reset the check engine codes, and see if reoccurs. I recently replaced my thermostat and it is not difficult at all. Suggest that you put a clamp on the radiator hose to prevent overflow of the coolant when you remove the old thermostat. About $10 for the thermostat which includes a new gasket, and 20 minutes to change out.