temp gauge reads higher with headlights on
 

I noticed at a red light last night that my temp was way up in the red zone. I pulled into a lot and turned the head lights off and noticed the gauge dropped back to the middle zone. Has the gauge gone bad or is it something that could take years to figure out.

You're not the first person to have this problem. Check out this thread:

http://forums.pelicanparts.com/porsche-911-technical-forum/123433-found-free-way-lower-oil-temps-20-deg.html?highlight=oil

/ J

I agree with the above link, Look for a grounding issue, especially at the
grounding locations as shown in the Bentley Manual.

Peter

The issue may not be grounding at the gauges! Temp gauge typically reads a needle width or so different with engine off at system Voltage of 12.8 Volts vs running at 13.8 Volts, do you may have an issue with the alternator and regulator if headlmps on causes a system Voltage drop.

To be sure, you need to monitor your system Voltage with a digital multimeter during a test run and note what the Voltage is with engine off, at idle, idle headlamps on, cruise at 2500 - 3000 rpm with and without headlamps on ...

Let us know what the readings are ... then you may be able to decide where to go from there.