Update: (Quick I know)
I have found a pic of the Land Rover external stat that's in the D2 showing the internals, really helpful in understanding the system.
Its a clever setup. Basically when cold, stat closed, the coolant bypasses the radiator via the hose that links the top hose to the stat housing. The coolant is still circulating through the block & water pump which is good.
When hot, stat open, there is less pressure through the radiator in comparison to the bypass spring so the coolant passes through the radiator.
The erratic temperatures are because the stat is lower down, after the radiator rather than before. Maybe insulating the thermostat housing will keep the temperature around the stat more consistent.
Just a thought as opposed to the mod...
Decisions.
Edit: Just also found this link that shows part numbers for lower temp stats and user experiences. I think I will try this route after reading this. Lots of changing of my mind on here but hopefully someone will find it helpful.
Lower temp stats & info.

