I have a 195 degree thermostat but my temp gauge shows 160 as normal driving temp. I know the gauges are not linear or super accurate but this seems way off. Is the gauge reflecting what temperature the ecm THINKS the temp is and would that then affect fuel mixture? Engine is definitely running rich (black plugs etc.) Is it the sensor beside the thermostat housing that feeds the ecm and/or the temp gauge?

 

First thing I would do is get one of those digital thermostat (the kind you point and pull the trigger to get a reading) and find out what your real temp is. You may have a T-stat sticking open causing you to stay cool and in open loop (rich). Start there, you need to know what your temp REALLY is so you have a true baseline to start diagnosis.