cooling problems

[84 400]

I tried the search function first but have come up empty..

Anyways here is the issue.
Just did a water pump, 180 T stat, new coolant temp sensor. I must be missing something here because it keeps over heating.

If I start it with the cap on it heats up and will go over. I then remove the cap and let it run and the temp drops down. While running if I recap it will not over heat. But next time I start it with the cap on... Bam over heat.
First fire up with cap left on and it runs good. but the heat starts rising. Remove the cap and the temp drops to normal opeating temp. then put cap back on and it is running fine. won't go over and rins fine. turn it off and refire and it rises over again remove cap and it drops...........
I am guessing this is air in the system???? IS this an air pocket issue? The T stat cover has a bung in it does this need to be removed or is that just for an accessory?

I tried squeezing the top hose with the cap off and it running to work out a potential air pocket and the level dropped but then today when I fried it up it got hot again..... removed cap with it running temp went down ect.......

Please feel free to re educate me on what I am doing wrong. I have been wrenching on it hard for the last week trying to get it inspected tomorrow and need to get this figured out.

Thanks