Hamwich, I think that's good news, looks like you've almost cracked it. Thermostats can when starting to fail behave in strange ways often failing to respond to the correct temperature spec but also present with symptoms like they are becoming tired and after a dozen or so cycles the range of operation reduces until it fails. Now technically they are designed to fail in the open position but can't be relied upon to do so. I think yours is in the tired stage and isn't opening enough so the water temp has a slow constant rise until it registers as too damn hot! Mind you it'd done well and had a long life!
