I had problems with the wiring and the thermostat on my 85 Turbo. The thermostat is quite easy to change on your engine. As John Sargent said, it makes sense to change that first because it does not cost much, and probably needs changing anyhow if it's never been changed. My was broken half way off, if the other side broke off it would have gone into the engine. My engine was running cold with it stuck open. I had a 92 C thermostat, but I replaced it with an 87 C one because I live in a warm climate. Don't forget to get a new rubber seal. I was able to drain some engine coolant by sticking a small tube down the drain hose in the reservoir. I pumped it out with a small hand pump. Then when done I just poured it back in. (my coolant had just been changed). That makes the job super easy, clean and fast.

My sensor wire had no insulation at all for about 3 inches - just bare copper. As I recall it's yellow or yellow/white. Anyhow it comes up in the cable bundle next to the power steering reservoir. I clipped the wire and pulled it out and used cable ties to run a new one to the sensor. I just crimped the end with a crimp tool and used a bullet crimp to splice the two wires together. Temp works great now.