Overheating Issue

You never made any mention of the most likely suspect. Check if the radiator fan is turning on.

"Gauge and thermostat not communicating" does not make sense. The thermostat is a totally mechanical device, and it is working. Proof is the engine does not overheat at highway speed.

The temperature gauge cannot cause overheating. It only reports what is happening.

The radiator fan is not needed at highway speed because natural air flow is enough. It is only needed at low speeds and in stop-and-go traffic.

An infrared digital thermometer could pinpoint hotspots if there are any. Is the engine really running above normal temperature? Are cooling fans cycling properly? Clean all grounds that involve cooling system,sensors on intake, in radiator, relays, etc. Keep us posted.

We do see the cooling fan kick in when we have it idling for a while. We were actually burping it when we saw that; however we saw the coolant level drop when the fan kicks in. Is that normal? Of course we were topping it up as the coolant level was dropping.

Also, if it were the cooling fan, why does the temperature gauge report normal reading instantly right after shutting off the engine and turning back on when the needle was near "H"?

Okay, so it may look like we may still have two problems; the cooling fan and communication problem between sensor and gauge?
We will talk to the mechanic tomorrow and post update here.

The next thing is to connect a scanner to view live data and see what the engine computer is seeing for coolant temperature. If there is simply a problem with the gauge and its sensor, the temperature shown on the scanner will be normal. The fan turns on in response to what the engine computer is seeing. Be sure the fan is running at full speed. If the motor has tight bearings, eventually the fuse will blow, but until that happens, it will run too slowly to move sufficient air. You should see the motor take a few seconds to coast to a stop when it cycles off. If the bearings are tight, it will stop almost instantly. It will also be hard to turn by hand.

Keep in mind radiators since the late 1980's are extremely efficient, and almost do not need a fan. It is not uncommon for the coolant temperature to drop a lot when the engine is off for as little as a minute or two. The coolant deep in the engine is still hot though, and it will circulate to the temperature sensor right after the engine is restarted.

Also, be aware that after the cylinder head gasket has just been replaced, a repeat failure is a good suspect. A recently replaced gasket is more likely to leak compared to one that has not been leaking for many years. Improper surface prep, incomplete cleaning, debris stuck in the bottom of head bolt holes, and things like that can cause repeat problems. Improper head bolt torque procedure, and reusing old bolts that are "one-time-use" will lead to another leaking gasket.

First, thank you so much for replying :) Here's an update - all the above has been checked with the mechanic and he said he checked for all of that. Now, yesterday, we had to use the to do a local errand and we had to use the heater due to the cold weather! Wouldn't you know it, the car never over-heated with stop-and-go driving for 1 hour. The needle didn't even move to the halfway mark like it used to as soon as it gets to normal temperature.

What does this all mean? Driving with the heater in the Texan heat in the summer season may not be a great option!

It sounds like we need to see if the engine is really overheating or if the gauge just says its overheating. This can be done like Caradidodoc or JOHNNY G.JR suggested.

Please run some tests and get back to us so we can continue helping you.

Best, Ken

Thank you Ken :) We just found out today that it is a cracked engine block! It made so much sense give the history. So given the age of the car, we are not going to fix but ditch! It's been an emotional roller coaster up to this point but glad it's behind us!
Ps: Wondering what our next car will be? Not an Hyundai, that's for sure! :D

Thank you so much everyone for trying to help see us through this! We really appreciate all the time you took to reply. You have helped others with this post, yet another reason for overheating!

was there coolant in crankcase? pressure test did not show this earlier

i have had 3 cracked blocks in 42 years in this industry, one ford V8 and 2 Mitsubishi 4 cyl yes they are extremely rare to see, but some times the odd does happen, and often it is along and expensive journey of diagnosis to get to that conclusion.