318 Chrysler

Just bought a '66 barracuda with the Chrysler 318 in it. It had been sitting (in the water) without being run for 3 years or so. It was my neighbor's and he has had it since '76. Anyway, I figured out that it had no spark. Cleaned the points, freshened the fuel, and changed the oil. It will now start and idle. It will run okay, but seems like it is missing on at least one cylinder. Not sure if it's spark, compression, valve timing, or what. Also, when I run it, after about 2-3 minutes, the thermostat begins to display readings of about 200+. The weird thing is that, when it begins to read really hot temperatures, I touch the engine block, and it really doesn't really feel that hot. Maybe a little too hot to hold my hand on for very long, but definitely not 200. I just changed the water pump impellers and bypassed thermostat. So, at this point, im not really sure what the issue could be. Need some help with this one. Maybe the thermostat is reading falsely, or one of my passages is filled with rust? Not sure..
Thanks, Jake.