Installed the new sending unit yesterday... didn't seem to help. So I started to do some electrical testing on the on the wiring and gauge. I disconnected the signal wire from the sending unit, and the needle dropped. When I grounded the signal wire, the needle was pegged. Figured the gauge was OK. Started to test the wiring and everything seemed to have good continunity and proper voltage. I decided to dig a little deeper and pull both the gauge and sending unit from the boat and re-create the boat's electrical harness. Once I had everything hooked up (minus the sending unit), I heated up some water in a pot to 170F and placed the business end of the sending unit in the water for it to warm up. I quickly connected the sending unit to the mock harness and found that the gauge was reading just over 200F. Checked the temp of the sending unit with an infrared thermometer, was reading 156F. Looks like the gauge is at fault. I ordered a new one... hopefully that fixes the problem.
Thanks for getting me on the right track!