Thank you both for the your thoughts. Steinhnj, I read the links you posted and thanks for that custom search page...very cool.
I am going to start with the sensor. To add clarity to my initial post, I am getting a high/hot reading with an engine that has been started today, with the key in the #2 position, not running. I have no other evidence that the truck is running too hot, just a weird acting gauge. If its not the sensor, I am thinking electrical issue (but no other problems) or incompatibility between sensor and gauge.
I will invest in an IR gun and give the water pump pulley a look as well.