1985 BJ70 3B diesel Canadian with a axt turbo kit, same problem.
I installed a 4 core radiator, replaced the fan clutch, installed red water wetter, checked boost level at 8psi, reset the fuel level down till it lost power and egt pre turbo temps would not go over 1050F, replaced radiator hoses top and bottom, replaced water pump, installed high volume flex fan, removed the fan clutch and added a solid adapter, advanced timing on injection pump, installed water alcohol injection after turbo for a intercooler action, finally I started checking out my thermostat.My thermostat was a 185F and it opened per the manual at 183F and opened beyond 10mm at 203F so far so good. Now comes the fun part my thermostat was in the rig when I bought it and I found the actual opening is smaller than a Toyota thermostat by 5 mm. The net effect was even though it opened as it should it could not flow the correct amount. I have installed a new Toyota thermostat and it appears to have changed the overheat under heavy load to an acceptable level. I am looking into rerouting the bypass hose with a 3 way valve and a ported vacuum switch to allow the bypass to act as another route to the radiator flowing more water at the right time during the heat up and cool down cycle while leaving the bypass to function like it should when the engine is cold. I hope others can shed more light on this subject.
Jim.