sounds like you have an obstruction somewhere. the only other thing I could possibly think of that would rob you of some of your flow, is if the heater valve is stuck open and a percentage of your coolent is just circulating through the heater-core and back to the water pump.
hoestly I doubt that could account for this much reduced flow but it could account for some.
I'm planning to switch my 89 over to an open system this spring. I'm serriously considering swapping out the mechanical fan for an electric that mounts directly to the back of the radiator (they have front mounting ones also but it looks like a real pain to try and get it in behind the grill.
my thought is that if I go with an electric fan I can re-route the upper hose so it goes more or less directly to the radiator. since I won't have to worry about getting it past the fan right after leaving the thermostat housing, I can avoid that whole air-trap made when the hose comes up off the engine, around the A/C pump and back down to the radiator.
when I get it done I'll let you know how it works out. so far temp is doing ok (actually running a bit cold), after a summer spent flushing it out and using cleaners in it about once a week for the last half the summer. I back flushed it, used prestone radiator solvents, syphoned water form the radiator (to get the debris from the bottom), put in a 180 fail-safe thermostat, cleaned up the contact on the 'coolent temp sensor'. and put additive in the coolant that is suposed to improve heat transfer from the engine to the coolent and from the coolent to the radiator (I had my doubts, as I don't put much faith in the 'mechanic in a bottle' products. but tried it and the jeep did seem to run noticably cooler than before).
I also burped out the excess air by removing the temp guage sensor while parked facing downhill. I have my doubts this would help you though as I'd thought that an open cooling sytem would solve the trapped air issue. I would have thought that with an open system you could get the car hot enough for the thermostat to open, then pop the cap off and rev the engine a bit pushing the air twards the radiator where it could escape, meanwhile you keep relacing the air with coolent unitl there is no room for air.
it sounds as if you've still got the radiator (and more importantly the cap) lower then the highspot in the upper hose. so that basicly if you did have it somehow burped you would loose coolent and replace it with air anytime you opened the radiator. (is this right?)
if so you will probably need to find away to re-route the hose so it climbs(one idea is the electric fan I mentioned, if someone has another idea that is better, cheaper, easier, or any combination of the three. I'd apreciate hearing about it before I charge ahead with my plan) more or less steadily to the radiator. without that I see no way to easily remove excess air if your cap and fill point are below the highest levels of your system.