71-series... Great engines. The Detroit 2-stroke temp gauge measures the temperature of the coolant just after it comes past the thermostat. The perferred temp gauge uses a capilary tube with a sensing bulb. These bulbs come in various lengths. Get the correct length so that the tip of the bulb extends slightly into the coolant stream. Having a stationary engine in your dragline means you can mount the gauge where convenient and observe it at your leisure. (Most of my experience is with 6-71 powered on-highway coaches from the 1950s). We had a cap-tube temp gauge in the engine compartment to use to calibrate the electric gauge that was forward on the dash.
Unlike 4-strokes, the 2-stroke Detroits can't tolerate temps of much over 200 degrees. Even with a 15 pound cap on the radiator, the head(s) are prone to cracking above this relatively low temperature. Remember, these engines were designed in the 1930s. The alarm stat/shut-down system is always stamped to activate at 203 degrees or 204 degrees or 205 degrees. This is the sequence of operation of the engine's temperature control equipment as things warm up: Thermostat opens. Shutters open. Fan clutch engauges. Every engine has a thermostat, the other two (extra cost options) were specified only if the original purchaser was more concerned about fuel economy and life cycle costs than about initial purchase cost. There are two common thermostats: Nominal 170 degrees and Nominal 180 degrees. Each starts to open at its rating and is fully open by 15 degrees warmer. The 170 (fully open by about 185) is used when there are shutters (the shutter stat opens the radiator shutters somewhere between 185 and 190), and a clutched fan (the fan clutch stat is set to activate between 190 and 195). The 180 (fully open by approximately 195) is used when there is no additional temperature control equipment. In both cases, all the cooling equipment (if properly functioning) is fully functional by 195.
Wet stacking occurs only when both the incorrect oil AND long periods of idling are perpertrated upon the poor engine. Run the correct oil, minimize idling, and you won't have any problems with wet stacking. Wet stacking is marked by oil seemingly POURING out of every pore of the engine and exhaust system. Some excess smoke comes out the exhaust, but not much compared with what is STREAMING out of the lowest clamped joint in the exhaust pipe. We used to tell the drivers, "Don't idle the engine any longer than a traffic signal," and "upon start-up, just build air and go." The instruction, 'run the engine hard for an hour' is necessary only to clear things up after changing the oil and changing the operating parameter.
I'd be a little concerned about the oil on the blower lobes as indicated in your photo. Every blower horn I've pulled off has exposed lobes that were clean as a whistle. The concern is that when sufficient oil leaks into the air intake, the engine can run on its own (the mechanic runs away, the engine over-speeds to self-destruction). The Detroit Diesel book indicates that you need two special (matched) pullers to disassemble the blower. One turns left, and one turns right. When I was working on these engines, we sent the blowers out for rebuild, but I've been told that one can pull the drive gears off the ends of the lobe shafts with two pullers that turn the same direction, it just takes some finesse. (I've had a Detroit 8V71 run away on me when I was driving a 10-wheeler dump truck. It was in gear and loaded to gross. The engine noise changed. That was all. It was always under control. Later that day when we were messing with it trying to diagnose, it took off again. THANK GOD my associate (the truck's owner) was standing there at ready with a wire tied to the shut-off lever on the governor. Valves were floating in the 3/4 second or so that it took him to realize it was time to pull that wire. It turned out that there was a rough spot on the control tube of the rack (spring-loaded fingers...supposed to prevent this sort of thing). I.e., it was fuel control under the valve cover -related. My concern with your engine is that it appears to be 'oil in the intake' -related and pulling the fuel cut-off lever won't help. Make sure your emergency shut-down (cuts air) works. It would be a real shame to lose that engine....or worse, injure yourself or someone else. Don't freak out over this, but they don't call it 'run away' for nothing.
Good lookin' crane, man. Hang in there with it.
~0le