Ok so my CEL has been on since I bought the car a couple of weeks ago. I have a TT 2003 1800cc. The code it's giving me is P2181. I replaced the temp sensor and the thermostat. Checked the water pump impeller and it feels fine. Reserve tank is getting coolant so the water pump appears to be working. My dash gauge goes up to 3/4 after running for 5+ minutes and higher the longer I run it until it goes into the red. Engine doesn't seem to be hot though. The fans are all working and I'm getting heat through the vents but running the heat doesn't cool down the coolant which is another reason why I think the engine is staying cool. What can I do next? (CEL is clear now because I disconnected the battery but the gauge still shows hot coolant so it will likely be back in a day or two).

 

I used the AC diagnostics to confirm the coolant temp was normal despite the guage showing in the red. Probably didn't need to replace the thermostat but it's done now. So looks like it's definitely the dash gauge at fault. Press Recycle + Up and turn temp to 49C to get the proper coolant temp. Saves a lot of time to check this first!