"normal" running temperature
 

https://cimg3.ibsrv.net/gimg/chevrol...57e6959e87.jpg
After the transmission woes, the running temperature went up to 212 degrees. Had the thermostat and thermostat housing replaced, coolant level is full. Bad sending unit?

More likely the dash gauge is not accurate. I had the same issue with my 95 S-10. New thermostat, new sending unit and still gauge was off. If you can find a non-contact infrared thermometer, run the engine to operating temperature and then check the temp at the thermostat housing. Compare the temp on the dash gauge the reading you got at the thermostat. Also make sure there is no air trapped at the sending unit to give a false reading. If the dash gauge needle doesn't go past this point you should be ok to drive without worry of over heating. It it moves further, into the red, You'll probably have to dig deeper.

Had it professionally checked, they concur the likelihood of a bad gauge, also suspect possible bad sensing unit. Actual running temperature well within acceptible range.