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· Cadillac Owners Connoisseur
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DFBonnett said:
On my '93 4.9 the rim of the stat fits into the groove in the gasket inner diameter then is set into the housing with the button side down. IOW, you fit the gasket to the stat then install as an assembly.
I think DFBonnett is right. That's how I did it on my Northstar also. The gasket fits around the rim of the thermostat, then the whole thing goes in. It does bottom out and push up the thermostat outlet a little bit. Nothing to worry about. Just tighten it down as specified and it will be fine. If the gasket is just sitting on top of the thermostat, pressure could force it out of the gap as you've seen.
 
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