If your diesel engine is showing signs of overheating, don't panic until you do some detective work. There could be a number of reasons why your gauge is "running hot." It could be something as simple as a faulty sending unit or thermostat. Of course if your head gasket is blown, your head is cracked, or your radiator is plugged your coolant may be boiling over you have some major issues and maybe you should panic....
Problem & Solution
Common among these chassis:
If you are not experiencing coolant loss, Kent recommends you use a hand held temperature "gun" to isolate the problem. These hand held temperature guns are now so inexpensive every DIY mechanic should have one in his or her tool box. You can use this tool to check the temperature of the cylinder head, the temperature of the top and bottom of the radiation and the temperature at the sensor to your dash gauge. This will eliminate the possibility that your dash gauge is not reading accurately. If there are drastic variations between the temp of your radiator and the engine you may have a failed thermostat, other obstruction or air in the cooling system.
If you are losing coolant or boiling over then you need to begin with a cooling system pressure test and go from there. See Kent's two part on demand video series on chasing this problem in a 1983 300 to discover what you might be up against.