I know yours is a 200, but on my 86 defender temp gauge it reads just on the red when the 300tdi is warmed up. This is using a defender (black iirc) sender.
i checked with a temp gun and it's not overheating.
I think the 200/300 both run at 88 degrees. Anyway, the 300tdi temp gauge is different to the 86 one.
you can probably use some different sender combos, but if you add a variable resister inline with the temp sender, then you could dial the temp in to N on the gauge.