My '94 started doing that about a year ago... it would bounce between 190°F and about 150°F. At first I thought it was the sensor or the associated wiring...
So, just after Christmas - I swapped in a t-stat from the local parts house. What a waste of time that was. Now the temperature swing went from 150°F all the way up to 210°F or so!!!! ARRRGH!
A day later I found a box in my room with a brandy-new t-stat and jiggle valve hose in it - all OEM Cummins parts. :-{} I swapped in the Cummins t-stat and the gauge held steady once it was up to temperature. That's the only variable I changed... so it had to be the t-stat.
Don't buy anything but a genuine OEM Cummins t-stat... local parts store t-stats will fit in the housing and it won't leak... but it will cycle to NASTY temperatures and then back down.
Matt