Joe, I agree that the heat is no big deal. It is the temp of the box that is the concern. You probably were in the early stages of "vapor lock" conditions. Vapor in the pump will not pump thus the zero.
Do you have any idea how hot the engine compartment was? Do you run the blower to keep the box ventilated?
I assume you are running in fresh water.
I did a re-plumb of the bypass line and had far more consistent control of engine temp and I could trust the gage much more. I posted some pics a few years back I think. I did this all without any t'stat. In fact when I bought the boat with the seized engine I removed the t'stat while getting it running. Just might work for your experiments as far as temp control and accurate reading are concerned.
Dave Neptune