The sensor's in the head, approximately under intake header #2. It's a single wire sensor (versus the FI temp sensor, under header #3, which ia a two-wire sensor).

On the 240, the wire to the gauge sensor is yellow -- don't know about the 700 series. A bad connection or broken wire can cause zero temp reading.

The temperature gauge is held to the instrument cluster circuit board by mounting studs (as is the gas gauge), which also act as the electrical connections. It's common for one or both mounting nuts to loosen with time and vibration, resulting in intermittent gauges.

If both the temp AND the gas gauges are misbehaving the same way at the same time, suspect the small voltage regulator on the back of the circuit board. It powers both gauges (and nothing else).

Could be a defective gauge, too.
--
Don Foster (near Cape Cod, MA)