The fluctuation is (was) normal on mine until I replaced the t-stat. It was normal on all the other earlt 2nd gen trucks too.
It will heat up to 180 then the stat opens and it drops to 140, builds heat, stat opens (you may see a pattern forming here), etc
The system is self bleeding also. There is a "jiggle valve" located above the t-stat in the head. It is what the small bypass hose attaches to that goes from the head to the t-stat cap. This is supposed to remove the air from the engine and send it to the radiator where it will go out through the overflow bottle after a few heat cycles.
Did you replace the t-stat? If so, where did you get the replacement?