Sorry for the long post.  This is a weird one.  95 Suburban K1500.  When the truck is warming up the in dash temp gauge goes to max for about 1 minute and then back down to normal.  The actual motor temp appears normal when gauge is max'd.  This issue appeared after rebuilding the motor.  I replaced the thermostat no change.  Drilled by-pass holes in stat to allow some flow when closed - seemed to help somewhat.  Checked sending unit resistance at 180 degree coolant temp and then loaded temp gauge lead at the sending unit with same resistance to ground while car was sitting with key on - gauge reading normal.  I should drive down the road with my resistor setup and see if the gauge moves while engine goes through it's warm up phase?  I'll report results within a couple days.

Monitored sending unit resistance when heating up.  Readings appear normal.  I checked engine ground to firewall ground - OK.  I suspect there still may be a ground issue since i get various radio interference from the motor.  Didn't notice this before motor rebuild.  I did measure current flow through meter between engine ground and inside under dash metal frame when increasing power consumption inside the vehicle.  Sorry, I don't recall the numbers.  I'll record some data on this too.  Sorry for the long post.  Have you seen this before?  Thanks for burning some brain cells on this one!

Make sure the intake gaskets were put on properly.  The condition you describe is generaly caused by the gaskets being installed wrong and blocking the coolant ports.

Make sure you got a good bleed on the cooling system when you refilled it.  Any air in the system hanging out by your sensor could be causing this too.