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I do believe you are correct, but here's how the system works. You turn the switch on, the computer is activated, the temperature sending unit, sensor sends a signal to the computer that it's cold so the computer sends out a signal to the engine to go into cold start mode. The fuel is enriched into the cylinders by raisin the idle just a bit placing more fuel into each cylinder, and the idle is advanced by a little electric plunger at the throttle body. Once the engine has warmed, the water temperature sensor sends a message to the computer to take the engine out of cold start mode and into normal run. Now you can understand why the temperature sending unit/sensor is so vital to proper starting procedure. Replace the temp sending unit/sensor and she will work just fine. School's out. Time to go to work.
To check the gauge is operating correctly, find the temp sensor wire. It will be a singular wire pluged on to a sensor in the top of the cylinder head possibly quite close to the thermostate housing. Disconnect this wire and short it straight to the engine. Now observe the temp gauge it should instantly move up the scale to hot. And decend just as fast when not shorted to the engine. If the gauge is working correctly then sender unit is probably at fault
When the gauge doesn't work, you have to determine, is it the gauge on the dash or the temperature sending unit on the engine or a wiring problem. Try this: find the sending unit on the engine and pull the wire off it. With the ignition key on, touch the wire to a metal ground on the engine. Does the temp. gauge move? If it does, replace the sending unit. If it doesn't move, replace the temperature gauge on the instrument panel.
Was this the original problem with the gauge? If so you have problem with a wire shorting to ground from your sending unit to the gauge. If the problem arose as a result of the sending unit replacement, the new sending unit is defective.
Check sending unit, Ford/Mercury put out a TSB, technical service bulletin : Article No. 95-13-2 07/03/95, on erratic temp sender units. You troubleshoot as follows :
Turn ignition switch to On or ACC position.
Connect a 10 ohm resistor between gauge lead and ground. The
centerline of pointer should fall within the band around the H mark.
Connect a 73 ohm resistor between gauge lead and ground. The
centerline of pointer should fall within the band around the C mark.
If gauge tests within calibration, replace sender.
To review, you have two temp sensors, one for the gauge on the dash and one for the computer. If you unplug the sensor for the computer the reading will be minus 30 degrees or over 300 which will make it very hard to start. Unplugging the sensor for the gauge would have no effect on the computer. According to the wiring diagram, the wire for the temp gauge is green, and the wires for the temp sensor for the computer are yellow and black.
You would need to study the wiring diagram to answer your final question.
The temp sensor of a basic pre-computerised temp gauge mostly just has a single wire and when a gauge doesn't work it can be tested by grounding that wire which then should result in a full scale reading from the gauge. If it doesn't the supply, gauge or wiring is at fault.
If there is a full scale indication the sensor could be faulty or perhaps the engine is too cool.
When electronic engine management came along the temp gauge was increasingly driven by the computer from the main sensor and the single wire type was deleted.
For electrically operated temp gauge, check the power supplying it. Most often, this is connected to either the accessory fuse or front dashboard instrument panel, check for busted fuse at the fusebox. If every fuse is okey, then your temp gauge needs replacement.
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