basicly if you do not run a thermostat your engine will firstly run rich due to the sensors reading cold engine temp, the extra fuel washes the cylinder bores causing the lubricating oil to become diluted and metal to metal contact to occour, also wear is increased by the fact that the oil wont have reached operating temp where its additives become active and can protect, and another factor is that aluminium expands 7:1 the rate of steel, so your pistons/rings wont have taken up the clearance allowed for this and you will have excessive blow-by and increased wear, same goes for your bearings, that is just some of the things that occour without a thermostat allowing correct engine warm up to operating temp. also having no thermostat will no allow the engine to over heat due to excessive coolant speeds as it will never get to that stage as it wont get to operating temp full stop.
when you say over heating is it actually boiling over/pushing water out of the over flow resivour/bottle? is it using water? or is the temp guage just showing high? common signs of a head gasket leaking compression into a cooling system is that the cooling system coolant is black and smells of hydrocarbons (exhaust smell) and possibly, but not in all cases as it can be confused with coolant flow, is the presence of bubbles expelling through the filler nexk in the radiator. also when running it is common for coolant to be pushed out of the over flow in this case.
there are about ten other signs of head gasket failure, try bleeding the system of air correctly, firstly make sure your engine is cold, then open your heater to the hot posistion next there is a little valve you undo on the right side of the engine when you facing it, undo this as you fill it slowly untill coolant comes out in a steady flow, close off the valve then continue to fill the system slowly untill it overflows out the filler neck, then start your engine, run it with the heater still open but the fan off untill your guage starts rising checking and toping up the level as required, when the guage is about half way to normal, turn on the fan this helps promote flow in the system to hepl bleeding by effectivly acting as a condenser, keep topping up the system as required untill your engine fans come on, signaling that the vital part of the system around the sensors, the final part is bleed, top up and put your cap on.
**** thats long, sorry guys, taking up all the space and all... still cant be as bad as your never ending story...
sweet man best of luck.
chris.