I know you said timing is "spot on" - but, I have found that a LOT of SBC cooling issues are timing related - static timing (at idle, Vac hose disconnected) may be "spot on", but how about the advance curve? AND - especially for a hiway cruiser - the Vac advance has to be working really well. Try disconnecting your vac advance hose at idle - if RPM drops, it is most likely working and you can disregard this message - plugging hose back in should increase RPM. If this does not happen, then you have found a part (maybe not all) of your problem.
Now disconnect the vac hose again - rev it up and see if the mech advance is working too.
SBC's are notoriously sensitive to timing and show their displeasure on the heat gauge
Is there any chance that it is running too lean? (Vac leak, etc)
Just fishing for ideas here