Ummmm, I don't think that 1/2 inch gap is causing the overheating.  There
are many upright aircools running around without any tin or seals and they
don't routinely overheat.  Now, over time they will warp the cylinders and
heads and valves.  What I mean is that little gap shouldn't be overheating
your engine, VWs are tougher than that.

I would blame the air/fuel mixture and/or timming.  Both of these, and you
seem to have played around with the mix, would run the engine hot.  The mix
is a delicate thing.

But, with the temps in the 90s, maybe you misdiagnosed the dipstick test?

James

  What I did find was a half inch gap in the engine seal at the
>rear corners.  It is as if that rear section of the bus could go a
>half inch further forward but it is exactly where it should be.  It
>sets flush across the back of the bus.  So basically it is sucking hot
>air off of the exhaust pipe for the number 2 and 4 cylinders straight
>into the engine compartment.  The seal was new with the engine and is
>still soft and pliable.  The problem is that when it makes that bend
>at the rear corners the top piece bunches and pushes up and the bottom
>piece bunches and pushed down.  I never saw the gap until I stuck my
>hand in there.
>--
>James A. Brill Jr.         \\  //
>jbrill@unlinfo.unl.edu   \\ \\// //      If you're not outraged
>University of Nebraska    \\//\\//     you're not paying attention.
>free-lance homo sapien     \/  \/

Red '93 SLC
Red '87 GTI
   and
'67 deluxe
'71,81,'85 Westies