I have an 83.5 Westy that had all the same symptoms that yours had.  I
would be cruising downhill or just idling around and all of a sudden the
temp would rise to the max and the red light would start flashing.
 I thought that maybe my thermostat was bad.  I replaced it.  That didn't
fix the problem.  I then thought that I might have an obstruction in my
cooling system.  Dropped out the radiator and flushed out the system with
cleaner.  I made a great effort to make sure that I "burped" the system
well, (got all the air out of the coolant system).  To do this lift the
font end of the can by about 15 degrees and then open the cock-stop on
the radiator and also on back by the engine.  Run the engine at about
2500 rpm and ad water until it comes out of the radiator cock-stop.
 After all this I still had a problem.  My van was dumping coolant out of
the overflow tank.  Not the pressurized expansion tank with the screw-on
cap.  It would fill the overflow tank and shoot out of the little
breather hole on top of the tank when I had shut off the can or was just
idling slowly.  Bad new!  :-(
 I went to a shop and they said as a last resort to check my expansion
tank cap.  That blue one with the threads on it and a hose coming out of
it.  I found out that the cap wasn't holding pressure at all.  This was a
great relief and I was glad to hear that the cap was only $14.  I was
getting ready to put new head gaskets on my engine or just rebuild the
whole thing.  That would be the worst scenario.  I pray that's not your
problem.  I hope that some of this is helpful to you.
 I would recommend having you cap checked by someone else if the overflow
problem continues.

My experiences.
Blake Heinlein   http://www.ecst.csuchico.edu/~bhein/
'83.5 Westy  "Toaster"
California State University, Chico
Mechanical Engineering Student