This has to be done when replacing service heads or take-off heads. It is much simpler (IMO) than juggling between different vehicle wiring systems hoping to make the gauge operational.
Yes, changing the pressed-in Temp sensor bushing is not really a do-it-yourself project. The machine shop that rebuilt my 292 would have done it at my request but would not guarantee it would stay sealed, due to the receiving hole likely being too corroded after 60+ yrs.
Option A... since the existing temp sensor in the head is the '57+ version, replacing the '56 (full-sized car) temp gauge in the dashboard with a look-alike '57 T-Bird gauge and adding the gauge voltage regulator is one way to do it. A rebuilt '57 gauge sells for about $130 plus a core return charge, and not including the gauge voltage regulator.
Option B... change the Temp sensor in the head to the new/replacement '56 version you already have(?) to match the '56 dash gauge in the car. This does require a 9/16 inch drill bit and a tapered 3/8 inch "pipe thread" tap to re-thread the bushing.
Either of these options 'assumes' that the existing Sensor or Gauge in the car could work correctly if they are connected to electrically matching parts. This is Not a safe assumption without testing those parts.
A '56 temperature gauge should have a resistance of 38 to 40 ohms if I'm reading this parts catalog right. You could also connect an ohm meter to the temp sensor hot & cold but I don't know what it should read, or how it functions internally.
A few cents worth of stray thoughts...
Drilling and re-threading the Temp sensor bushing wasn't as difficult as I expected. And there wasn't an option to use a gauge that would match the (smaller/'57+) sensor that was in the head. But it would have been more difficult if the engine had the intake manifold installed.
If you still have the new (larger/uninstalled) '56 temp sensor... I hired a 'car guy' plumber to come over with the drills & a pipe-thread tap. He re-cut the smaller Temp bushing on my engine, it wasn't too expensive. In hindsight I could have bought the drill bit & tap for slightly less and done the work myself. Approx $50.
Looking in a Hill's Thunderbird '55/'57 parts catalog... you can buy: a new '57 temp sensor, a rebuilt '57 Temp gauge, and a new gauge voltage regulator for about $200. With the exception of adding the gauge voltage regulator, they should be 'bolt-in'/direct replacement parts.
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