My 89 Westy with 140K miles pegged the temp gauge for the first time, but the warning light didn't come on. It happened about 45 minutes into the trip at the bottom of a 20 mile long hill on the freeway that drops 3000 ft, was traveling 70-75 mph, outside temp was around 35 deg F. I pulled into a rest area and let it idle a few minutes and the gage slowly decreased off the upper mark. Shut off the engine and let it cool about 15 minutes, no leaks noticed, coolant refill tank still had the normal amount. Restarted and the gage was a little above normal, warning light blinked at startup and then went out as normal. Went another 2 miles down the freeway and it pegged the gauge with no warning light again. Pulled off and shut it down, opened the engine hatch to let it cool completely for an hour. Opened the expansion tank cap and the tank was still full, so it appears there's no coolant loss.
Decided to nurse it home the same route. I expected the temp gage to climb immediately but it didn't, it actually took longer than normal for the temp gauge needle to stop just below the warning light, normal level is at the warning light. Continued climbing back up the hill, mostly in 3rd gear at 4000 rpm, with the gauge needle below normal, sometime just off the cold mark at the bottom. Got home ok. Checked the temp gauge operation by removing the sender unit connector and grounded the lead with the ignition on, guage needle went to the top as expected.
Overheating on an extended downhill run and then underheating while climbing back up seems very strange. I initially suspected a bad temp gauge sender unit, but now wonder if the thermostat broke and it stuck closed going down the hill with the water pump keeping it pushed closed, then it stuck open after it cooled off for the return trip. All the cooling system components are still the original, have done regular coolant changes, both heads were repaired for coolant corrosion leaks around 80K miles. I haven't a chance to check the t-stat yet, anything else it could be??
Should have mentioned the radiator fan seemed to cycle as normal, came on to the 2nd level speed after I shut off the engine. Turned on the A/C briefly on the return trip and the fan cycled as normal. Also, the water pump was replaced around 100K miles.
I would suggest that it's possible you had an air bubble. However, that wouldn't explain the "undercooling". It almost sounds as though the gauge were reacting to whether you were pointing up or down.
My guess would be thermostat. Likely it was getting stuck closed, then got stuck open. I'd start there.