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Robb --
The voltage regulator is shown in the pix below, and the second picture shows the location of the compensating board.
First, be certain the four nuts (two per gauge) are tight. The studs on the meters mechanically secure them, and also serve as electrical connections. Next, be sure the three regulator legs are shiny and properly (tightly) inserted into the socket. Finally, try a replacement regulator.
"...all is operating normally, shouldn't the thermostat keep the engine at exactly the same temp..."
I would expect the thermostat to keep the temperature within a narrow temperature rangeprobably +/- 10 degrees, or less. For the thermostat to open more (for additional cooling) the actual temperature must rise a bit. And likewise, when the engine load is reduced, the temp will drop somewhat, which cools the thermostat so that it closes. In any simple control loop, some error MUST exist to initiate corrective action.
The whole point of the compensating board is to minimize the needle swing with genuine engine temperature changes within this normal but narrow temperature range.


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