Richard, read the "Knowledge" article on cooling; there are many things that can cause overheating and several fairly easy ways to improve cooling. I would double check your ignition timing, carburetor jetting, and fan belt tension first. If jetting appears to be correct check for vacuum leak(s).
Then check for air leaks into the engine compartment from under the car (sucking back in, or recycling spent hot cooling air). An exhaust system that's too small can be restrictive enough to cause overheating.
Oil temp of 120 C (248 F) is much too high for comfort with "petroleum" oils and also too high for synthetics; I would guess your cylinder head temperatures are very marginal. These temp definitely indicate a problem (or problems) you should correct ASAP.
My 165 to 170 BHP ex-2,110cc type 1 engine will run at 210 F on a hot summer day cruising at 70 mph (3,250 RPM) running 20/50 AMSOIL synthetic. This is with full-flow filter, 30mm oil pump, 1.5 quart bolt on sump, modified doghouse shroud with type 4 oil cooler, and a Porsche 356/912 alternator belt pulley. No auxilliary oil cooler is fitted. Fall and winter are cool/cold enough to swap back to the larger VW alternator belt pulley.
(Message Edited 4/2/2003 12:04:24 PM)