2000 JettaGL Coolant light on when cold

My coolant light flashes, and I get a beep when I first start the engine if it has been really cold the night before. It only stays on for a few minutes, and only if it is cold out and the car hasn't been started yet. The coolant level is pushing the max on the bottle (I guess I will overfill it a little and see if that helps?) This happened a couple of times last year, and hasn't happened all summer till now.

I consider myself a reasonable DIY, who refused to have the dealership charge me $150 (No kidding that was quote over the phone) to troubleshoot something that I am not sure needs to be fixed anyway. What can make the coolant light flash? Is there another sensor besides the one on the top of the coolant bottle? Can I use an ohm meter to check the sensor on the bottle? Has anyone seen something like this before? Any other ideas as to what might be causing the problem would be great. I doubt it is in the insturment cluster because the light goes off even if the inside of the car stays cold - So my guess is a sensor in the engine.

Thanks in advance for your replies, and thanks for having such a great forum.

What are the wire colors on your level sensor?