I had a similar experience earlier this year with my 1986 4/4. After many years of showing a steady 90C under all conditions, it started showing 110-120. At all times the ECU temperature reading was normal and tallied with coolant temperatures taken with an IR thermometer.
I ended up replacing the temperature sensor, thermostat, water pump, and voltage stabiliser. The gauge still shows a higher than normal temperature despite repeated readings which show that the coolant temperature is exactly right.
I've decided to just accept the fact that my temperature gauge now reads high, as if I were to replace it I'd have to replace all my gauges. A single bright shiny new gauge in a dashboard of otherwise shabby nicely patinated 40 year old gauges would look daft, and I can't afford a full set.
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