Check this out - http://www.toymods.org.au/forums/tech-conversions/28465-3sgte-cooling-sytem-problems-tech-info-required.html
Specifically - "Secondly, you need at least one of those 2 pipes that comes out of the back of the thermostat housing connected. One is for the return pipe from the heater, which can be disconnected if you don't need a working heater, but the other is the water recirculation pipe which needs to be retained. This should run into the water outlet housing on the rear of the engine. If you block this off, the hot water never reaches the back of the thermostat to tell it to open and your motor will overheat"

This diagram is better than the one you posted

Ahh, very good point. thanks for that.

More pics











 

An update - I have had the wheel bearings replaced on the rear and have now fitted the rear suspension back into the car. I have fitted the brake upgrade to one side though have issues with the other side which may take a while to fix (don't ask). I have a feeling that Celica ST185 calipers will fit on the Mazda RX8 rotors along with Kameleon's brackets, so will try that in the next couple of days.
I'm still (slowly) bolting other stuff to the engine which as you can see from above is sitting in the engine bay.
There isn't too much more work to do. The largest job is the rewiring of the engine loom. I intend on getting a big connector so I can easily disconnect the loom when I take the engine out next time.
I'm also moving the fuse box into the boot to get it out of the way in the engine bay. The intention is to get rid of the old spaghetti and make it all nice and tidy (and easy to work on)
I should have it running again in a few weeks hopefully

Nice, clearing everything out helps a lot when your pulling engines in and out on a regular basis.
I removed my engine last week. It took about 3-4hrs which Im happy with but would be pretty good if you could get it down to 2hrs.
 What about quick release lines? 
We should work on a Christmas track day. Everyone should be sorted by then. 
 

Sure

UPDATE - I tried to start the engine a couple of weeks ago and found that the injectors had seized. I assume this was caused by them lying around dry after having E85 in them. I sent them back to the states where they cleaned them for me for free and I put them back into the car today and it started right away.
I have given up on E85 - it causes too many issues. I want my car to be reliable so I can drive it and enjoy it. It has spent far too much time sitting in the garage.
The only thing wrong with the engine now is that there is an oil leak from the hose that goes to the oil pressure gauge. I'll be going to the shops tomorrow to buy an electronic one. The ones with the hoses are s h i t.
I'm happy to have it going again. I'm still waiting for my new front ball joints to arrive and when the front end is back together, I'll be off for a wheel alignment and then a dyno tune and then I'll be ready for the track again. Yay!
 

Here's a pic of the tidy engine bay

No more crappy wiring.
During the rewiring, I found that one of the relays didn't do anything at all! Damn that previous owner!
I also had an issue with one of the cheap Chinese relays and I replaced it with a Bosch one. It really does pay to use good quality components.

How long were the injectors left out?
Can you post pics of the intercooler setup in the boot