Hmmm... Thanks Bruce, I didn't consider a thinner oil, when I have aero engines running high temps the fix is to go to a thicker oil but there's no pressure bypass for the cooler, usually just a temp valve and a strong cooler. Owner was going to ask Duane what went in to the oil system but I haven't heard what he said, might just go visit Duane tomorrow myself.
I agree 40-60 is way too much of a good thing. My own 71 bus has around 5k miles on a stock rebuild and it runs 8-10 at idle and 40 at cruise. 110 deg temp most warm days, peaked at 150 last thursday when it was hot out. Hits 190-200 on the freeway doing 70 for 1/2 hour +.
As to IIIbuggy's question, yes, checked all that as soon as the guage was installed and we said HOLY CRAP THAT'S HOT! what's causing that?.