Check the single wire sensor below the ECU coolant temp sensor on the waterneck.
This is the sensor that drives the instrument cluster gauge.

 

Thanks, I’ll check it out.

 

Here's a helpful picture of sensors around the thermostat housing and side of the water neck. The cold start sensor on top is obscured by the vacuum lines in the photo though. You can check the resistance values against the specification in the manual if need be. Could be just a loose plug or broken hanging wire. The gaffe I always fall into is unplugging the oil pressure sending unit when messing around in that area. Its a real eye-opener to see no oil pressure showing up on the gauge.

 

Thank you for the picture! My uncle's MKIII temp sensor seems acting up as well. We will take a look at it right after we finished installing the exhaust and cold air intake kits on the current TJ project. My cousin recently worked around the sensor area and probably moved something.

 

The ground wire for the sensor is on the intake manifold which can cause issues sometimes too. If it become completely discounted there your temp gauge will be maxed out at hot FYI.