Kevin, What you describe sounds exactly right for most any car with thermostats. What happens is, the stats are closed, isolated in the radiator hoses away from the heat source. No water is circulating, the heads get to a high temperature before the stats begin to feel the heat, after which they open, water begins to circulate, the overheated water is replaced with cooler, which levels out at normal running temperature. Your temperature gauge sees all that has happened, and scares the hell out of you. Be glad, your cooling system is working just fine.
Some stats are installed high in the top radiator hose, far away from the heat source, while others are snugged up to the heads. Both will show the symptoms described, but of course the isolated stats will show worse. Drill a couple of 1/8" holes in the stats valve to allow a constant bleed through, after which they will heat and begin opening much sooner.
EDIT: By the way, I think you mean 260ºF and 210ºF, right?
