Did he replace the thermostat and bleed the cooling system of air? A head gasket will not cause the temp to spike when cold, but air trapped in the cooling system will. Before you tear that engine down again, do a compression and cooling system leak down test. I seriously doubt by your symptoms that it's a head gasket (not impossible, but highly improbable). The temp sensor for the guage is in the rear head, the temp sensor for the computer is in the intake just below the t-stat housing. This is the area that the air pocket will form if the cooling system isn't bled of air properly. The guage will peg when the sensor is not immersed in coolant, and the ECT will show it's overheating as well if there is air in the system around it. Many people, myself included, will drill a 1/8" diameter hole in the t-stat flange to allow the air to escape while filling the coolant.