I second that. sounds like the t-stat is not allowing coolant to circulate through the system, so hot water stays in the block and gets hotter, while cold water remains in the radiator.

I'd take out the t-stat, flush the system, run the engine again (without it) and see if the temp peaks. If it doesn't that was probably the culprit. Then replace the t-stat. That's the cheapest part to replace before you blow a head gasket...or worse.