I took the Cougar for a trip from Houston to Dallas as few weeks ago (a nice visit with the Lone Star Cougar Club at a car show). At 75 mph and higher and 85 to 90F weather the engine temperature was running hot (no problems at significantly lower speeds or at idle - the car has big block fan and thermostatic clutch).
Sounds like the classic 351C thermostat bypass issue. I had previously confirmed that I had the Robertshaw type thermostat and thought was correct for the engine. Pulled the thermostat today and discovered that it is not the proper thermostat for the 351C. I’ve seen the discussions on the thermostat types and on the restrictor plate before but my previous Cougar (351C-2V) had never had an issue and up to now neither had this one (351C-4V). I’ve collected some spare thermostats and a WCCC restrictor plate and was contemplating changes (perhaps even a new water pump). What I found was some subtle differences in thermostats. The first picture shows four thermostats. The top two are the conventional design and the bottom two the old Robertshaw pressure balanced design (now available from FlowKooler & WCCC). The two on the right have a top hat like collar on the temperature bulb and are correct to the 351C with the bypass orifice. The collar blocks flow through the bypass when the engine is hot (the bulb moves downward as the thermostat opens for the main flow). The orifice is 0.750" dia. the collar 0.675" dia. There is still some leakage (less than 20% of the orifice area). Without the collar the flow area is only reduced by 50%, allowing significant bypassing when it should be closed. Some internet searching indicated that Ford designed the bypass to provide some circulation in warm-up and avoid potential hot spots in the heads. Some people have had issues (presumably with the correct thermostats) of overheating with the bypass leakage and a restrictor plate (see second photo) is available the replace the orifice and block the bypass flow (except for a very small air bleed hole).
My intent here is to share the thermostat information, initiate some discussion, and help me decide whether to just install a proper thermostat (e.g. WCCC #30466) or to pull the orifice and install the restrictor plate.
