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If the a/c is on, the ECM doesn't care what the Coolant Temp is - a/c fan operation is controlled by a switch that opens when the high side reaches about 220 psi, and depending on outside temperature, it can reach that pressure within a matter of seconds. So when the ECM sees voltage on this circuit it grounds the main fan relay and after the air flow across the condensor coils has reduced pressure to about 190 psi, the fan should turn off. Non a/c operation is controlled by an input from the Coolant Temp Sensor. The ECM will ground the Main Relay with a Coolant Temp signal of 226 degrees so the fan shouldn't be cranking until then. You troubleshoot the a/c part with a manifold gage set. Non a/c diagnosis is with a scan tool as that's the only way to visualize the Coolant Temp Sensor signal. If it's working right in both cases, you simply have a bum Display or the gage sender is faulty, or the gage wire has too much resistance. You can do a quick test by unplugging the gage sender (right head between cylinders 6 and 8) and that should cause the gage to read LO. Then ground the wire and the Gage should peg MAX, usually about 300 degrees for an '88.
If the fan is coming on at 150 deg then you have a low temp fan switch for use with a 160 deg thermostat and chip. You should make sure you dont have an aftermarket prom in the ecm before putting a stock 195 deg thermostat in there. If your prom has a high total ignition timing advance designed to be used with premium fuel and a 160 deg thermo and you restore the cooling system to stock without replacing the chip you are likely to get lots of detonation and sluggish performance.
If the chip is stock and for whatever reason there is a 160 thermo and 150 deg fan switch all you should have to do is go to the parts house and get a new stock fan switch and thermostat.
Huh? What fan switch for the main fan? It's signal is from the CTS. Why someone would need some sort of switch with a custom chip eludes me - seems like something is missing from the "custom" to say nothing about how you'd keep the a/c system from blowing a hole in the hood using a stand alone setup.