our fresh-water cooled Yanmar's temp. but do know you can lay your hand on the head after a long run at full rpm without any undue comfort. Also the exhaust water/gas coming from the outlet is only warm to the touch. I wouldn't be surprised if your gauge is accurate. Compared with an automobile engine with a radiator, the heat exchanger with it's continuous flow of cool water, is remarkably efficient. Also the Yanmar thermostat tends to open quickly and pretty much stays open during operation as far as I can see. It doesn't really seem to regulate the water on a real time basis. These cooler operating temperatures are the cause of marine engines "coking up" the exhaust manifold more quickly than others, according to one tech I know. All of this is pure conjecture on my part.