Installing a thermostat in my 1996 Chevy 1500 truck

The picture is for gasoline engine, as far as the thermostat being turned up or down in the cavity, is that how you placed it? You may have air in the system? Some makes and models have bleeder valve for cooling system, some don't. For a while, keep checking the coolant level in radiator, cool engine, to make sure it is full.

There is a small rubber gasket, that goes on the thermostat itself. Did you forget to install that, before installing gasket and housing? If so the thermostat is too small for the manifold opening, allowing it to move about 1/8 to 1/4 of an inch.