I recently built a 414SBC that runs well at full throttle but while cruising on the street, it rapidly overheats.

This is a EFI motor. The temp gauge sensor is located between the 6 & 8 cylinders. It indicates >115 DEG C + while cruising. The ECM temp sensor is just below the thermostat housing. Via the ALDL, this sensor reads normal at ~80-90 Deg C when the other is at >110Deg C.

The gauge sensor temp will swing 10Deg C within 30-45 seconds. I have replaced the sensor and checked the output electrically. I've also checked the temp of the head using an IR thermometer and I don't believe the sensor is giving me an incorrect reading.

When the motor was new, the temp swing was barely noticeable. Now the peak temp is increasing.

Crack in the combustion chamber? Leaking head gasket? Has anyone else experienced this?  

I have a 383 that had a leaking head gasket. It was leaking combustion into the rad fluid. When I first started it the head temp would go way up until the thermostat opened. The temp in the head could get as high as 260 if I was betting on it. The temp up top at the thermostat housing could be 150 and on the rad cap it was 90. I could feel the rad hose jumping from the fluid in the head boiling. If I removed the thermostat and ran an open restickter it had more fluid movement and would not do it. The combustion in the fluid should make it go acidic. Can you find someone to check it. Or try putting the positive lead of a digital meter in the fluid at the rad cap and the negative on the battery negative and see if there is voltage there. If it is acidic you could show a volt. Are you useing aluminum heads, they could be moving around. That is what mine did. Went to a different gasket.  

thanks for your feedback...yes the heads are aluminum, block is iron (dart little M).. I will check the fluid with a volt meter...that's a great trick!  

if you used a 400 block for your 414sbc and didnt drill the steam holes between the chambers of your heads, or used head gaskets without the steam hole provisions than it will cause localized heating at the cylinder head below 3000rpm. (400sbc blocks are the only ones that i know of that have these steam holes), you can drill the holes in the heads with a hand drill using the gasket as a template and drilling at a 30 degree angle from the head surface.(BE SURE TO GET DETAILED INSTRUCTIONS FROM SOMEONE POSSIBLY(CHP) BEFORE YOU DO THIS YOU CAN RUIN THE HEADS)