RAD PROBLEMZ
Water, at a particular temp, occupies a finite space. Heat or cool that water and it will either expand or contract, requiring either more,[as in this case] or less space to contain it. Obviously, in this case we do not have enough space once the water gets hot, thus the need for the overflow tank. The problem is that the tank, assuming it's filled correctly when cold, is still NOT enough.
That being said:
1. I agree w/ Nick. The water temp IS NOT the thot to be 165 to 175* temp.
2. As others have said, the system has air pockets in it. That would not contribute to the water being blown out, as you said you ran the engine for some time when filling it, to allow the air to escape.
3. The heater has nothing to do w/ this problem.
4. I would do the following:
A. Compression AND leakdown tests. [WATCH the rad for bubbles when doing the leakdown!!]
B. Rad flow test.
C. Confirm that:
a. The belt tensioner travel is not locked and the WP is slipping.. Belt too long and the tensioner out of travel, etc, etc.
b. The stat is not in backwards.
c. The lower hose has the required coil wire in it to prevent it from being sucked shut.
d. The temp ga. is accurate. [I'd also scan the rad face when hot w/ an infra red gun to see if there are cold/hot spots]
Another way to confirm the gasket is/is not gone, is to pressurize the rad w/ the plugs out of the engine. After letting it sit for a while, unplug the ECM and open the TB wide open, spin the engine over w/ a clean paper towel at each plug hole... Look for H2O on the towels...
Also, "taste" the exhaust vapor
Sugar? IT'S antifreeze!!!
Bottom line is: the volume of H2O is increasing due to heating and the system can't hold it..If it was air entrapment, it would seem to me that the air would rise to the top of the rad, [it's higher than the thermostat] and when the PSI got hi enough, [over cap setting] it would escape into the overflo, leaving the coolant behind.
My story, and I'm stickin to it!!