I also have the problem. Converted to 12 volt without voltage reducer, everything worked fuel, gen, op lights but the temp gauge.  I tried a standard ford voltage drop unit and it shorted out.  I also tried both old and new temp senders. 
I recently bought a MAC voltage drop unit which looks a little more sufistacated but have not installed.  It cost about  $35

You need to use the original style sending unit. Ford gauges of that era worked on a different principle from modern gauges so they won't work with modern senders.

I HAVE A 55 FORD CROWN VIC. TEMP GAUGE GOES UP TO NORMAL WHEN STARTED AND GOES TO COLD SHORTLY.
I HAVE CHANGED THE SENDING UNIT AND TEMP GAUGE. IT ALSO HAS A NEW WIRE LOOM. IT HAS A LATER SENDING
UNIT...DO I NEED TO GO BACK TO THE OLD STYLE?? ANYONE ELSE HAVING THIS PROBLEM??