Yeah it sounds like you have air trapped in the system. How did you run the steam ports?How did you bleed the air out? Did you block of the ports on the side of the water pump?
The temp reading at the back of the passenger head actually reads cooler than the one at the front of the drivers side cylinder head. If you plumb a temp guage into the "back port" that most people plug off on the water pump, that water temp will measure the same as the back of the cylinder head on passenger side..
In respect to your thermostat, did you notice if yours had any holes in the back plate that separates it the "front" and "back" chambers of the water pump? Or did it have any ridges on it to keep from sitting flush against the boss to the back chamber? There are different thermostats that I have seen and this can be an issue for bleeding air. One has holes drilled in it from the factory.but, is "flat.". I drilled holes in mine just for insurance. Two, the back plate has ridges on the face of the plate to allow water to bleed from the back chamber to the front without the back plate having to open. Mine has this as well. Third, type is flat without any holes. So if you have this later style you can run into issues with getting air out. I know some that run no thermostat, some that run a freeze plug with a hole in the center pushed into the hole for thermostat, and some with a "gutted" thermostat. Go here
http://www.pirate4x4.com/forum/general-4x4-discussion/847999-lsx-thermostat-5.html#/forumsite/21027/topics/847999?page=5
But, it definitely sounds like you have air still in the system.
