Hi Gil,
Pulled the new BMW t-stat out and put the old Fiat Abarth stuck open t-stat back in, problem solved. I just drove it around quite a bit in hot weather including sitting idling in traffic. Warms up a little slowly as you would expect form a stuck open t-stat, then stays in the 1/3 to 1/2 operating range. Heater works very well, front radiator fan comes on and the green dash light comes on as designed. Virtually no coolant came out the overflow hose.
I'm going to boil the BMW t-stat and see if it opens, but I have to wait until my wife is not around the kitchen.
In retrospect, I think my car's cooling system problems were: radiator cap not sealing and wrong PSI, faulty temp switch in front radiator, unable to bleed the heater due to corroded fitting.
Hope your project is comeing along well!
Eric, San diego