Using straight water is wrong on many levels that I won't address right now. Your engine came with a standard STANT thermostat that worked well for decades without issues. The real issue is, your engine was not designed or built to burn today's funky gasohol, but we're stuck with it.
Retarding your timing works well because the engine doesn't have a chance to burn the gas all the way. At the expense of even worse gas mileage and less HP, unburned gas actually cools the combustion chamber. I don't like this approach at all but it works. There are other solutions.
Since you changed your intake manifold gaskets, did you also block the exhaust crossover port? I always do this just to relieve the cooling system. I believe, there is no reason for the cooling system to deal with exhaust heat. When I block this port with a small patch of shim stock, I also disable the heat riser valve. Actually, I use a cutting torch to gut the heat riser valve so the outside looks the same and the 'axles' still plug the holes but the center is clear. Now, both banks' exhaust exit straight out their pipes.
Trans oil warming is really important for our northern winters. I would definitely use the cooler in the radiator and reserve separate coolers as a last resort.
Here's a thought... Did you ever consider cooling your 300˚F oil? Oil pressure reaches 60-PSI to push through 3/16" brake line to feed a cooler. It should not affect pressure unless your engine already has low pressure, and cooling would sure help any system that is overheating. You could buy or make a cooler from 1/4" copper tubing; flatten the straight parts for more surface area and solder solid copper wire between the coils for more heat transfer and cooler strength.
An oil cooler works well because when your engine is cold, it won't cool. When your oil gets hot, ambient 110˚ Texas air hits 300˚ oil and efficiency finally has a chance to work because of the drastic difference in temperatures. - Dave