Update:
Just thought I'd provide a final update. The overheating problem has been fixed! The remedy was a 30 cent freeze plug and a dab of JB weld to ensure the freeze plug fit snugly. We took the boat out last Sunday and the temp held constant at 170 degrees.
Thanks to everyone that contributed! This was definitely a learning experience, and as "STU JACKSON" said in an earlier post, "none of us was "born" a diesel mechanic," but thanks to this experience- I feel one step closer!
Happy sailing!