Your thermostat may be air locked. If exhaust is getting into your coolant system (or system is not bled properly), the air pockets that form aren't hot enough to trigger the thermostat.

 

Gasses pass more readily than fluids. In the typical early 2.5 head gasket failures, exhaust gas enters the cooling system, and you can see bubbles in the expansion tank. The breach can be very small and won't even fail until the engine reaches a certain temp. when parts expand.

Ok, went for one more round same result. Filled rad, from both ends, and filled reservoir. car overheated as usual. top rad hose was boiling inside, bottom rad hose cold, rad cap cold, coolant in rad barely hot. Couldn't notice any smoke coming out the exhaust pipe, and didn't notice any smell. And still no heat in the cabin the entire time.

When I had head gasket trouble, symptoms were exactly same. I don't recollect lack of cabin heat though. I thought it was a stuck closed thermostat with upper hose hot and lower hose cold. But there was lots of exhaust in expansion tank and bubbles.

 

I don't still fully understand the physics behind it. DOES ANYONE UNDERSTAND THE FULL PHYSICS OF THIS OR POINT TO AN ARTICLE ON INTERNET - I COULDN'T FIND IT.

 

My hypothesis:

 

Coolant thrown out into expansion tank by bubbles keeping the coolant cool near the radiator cap/lower radiator hose and preventing the thermostat from opening. The coolant in engine is still hot and so is the it near the upper radiator hose. Another possibility is that bubbles around thermostat also preventing it from opening.

 

I am also not sure where thermostat is on modern cars - waterpump side (Subaru) or upper radiator hose/engine. It would seem to me that if thermostat was mounted on upper radiator hose/engine, it would open.