If you drove it for a while with a 160 thermostat and the infrared gun showed 205, you have a problem.  My first suspicion is the rebuilt water pump.  Not all rebuilds are equal.  If high speed driving increases temp, the problem is almost certainly not airflow, but rather getting heat from the engine to the airstream.  That could be a dirty cooling system, bad water pump, blocked passages in the radiator, faulty thermostat, anything that hiders transfer of heat from the block to the fins of the radiator.

Larry

OK JC. Now some may disagree, but coming from a 36 year rad man. When you run as low of stat as 160, whats happening is when the water hits 160 the stat opens. So, your water is running constantly through the stat and climbing to whatever the temp it wants to be. The idea of a stat is to allow the block temp to hit 180-195 (preferably for me), transfer into rad,  then the cooler water hits the stat and it closes. This allows the rad to pull the temp down, therefore starting the process over. Now when your bringing up RPM's the water flows through the system a lot faster, therefore not allowing the rad to do its job. Most guy's here run 180. I run 195 and my 350 motor sits right at that temp.

I agree with Terry and Larry. A cold temp T-stat lets the water flow to fast and you won't get the heat to transfer. If you said it would over heat at idle then I would suspect CFM's coming from the fan/fan clutch. Driving down the road moves more air then the fan draws so if it is getting warmer you need to make sure the rad is not cloded.

I have seen this numerous times on Vettes. One thing to check first is the condition of the radiator hoses, particularly the lower hose. At high rpms/high flow demand, the hose collapes and shuts off the flow. I have not done a search of the archives, but several members had a similar problem. The lower hose turned out to be the problem. It was a problem on my 75 when I first purchased it.

Scott

Good thought Scott, make sure it has the spring inside it when you check it out.