Yep that's good news. The thermostat has become pricey lately, so it's not a bad thing that you had this work done.

 

How many ASE certified mechanics does it take to change a light bulb? Not sure about how many hands it takes, but flat rate is 1.3 hours.
Should not have lost enough coolant to use the shop rag they charge you for.

 

I had the EXACT same problem although when the gauge flatlined, the A/C compressor would not engage (the ECM detected a "problem", I think). Lived with it for 40K miles. I monitored the engine temp with a gun and as a mechanic of 50 + years, determined that the t-stat was functioning normally. I BELIEVE that I checked as many electrical connections as I could \get my hands on. I replaced the temp sender (CTS) and there was no change. Just for giggles, I changed the sender again with a different brand. Bing-Freakin-Go!! It has NOT malfunctioned since (over 5K miles since repair). The temp reading on the dash (with the info function) is now normal. The engine has 205K miles with the ORIGINAL t-stat. I can assert that the coolant temperature CAN NOT change instantly UNLESS the coolant level is at a point where it will "surge" through the system. I have the sneaking suspicion that somewhere I inadvertently "repaired" a faulty connection or some other intermittent circuit. I really wish I knew what the "real" fix was...

 

Actually, it is ECT in GM speak.
P0128 disables the AC compressor because the ECM cannot rely on the temperature data.
There are only 2 wires involved; Low ref and signal. If the ECT is good, the connection on it or the pins on the ECM connector are suspect. If the ECM has ever been disconnected the pins can push out the back and cause intermittent problems. There should be less than 5 Ohms between the low ref pin on the ECT to ground.

The minimum acceptable engine temp is 176F, The ECM takes the startup IAT temp and the startup ECT temp and calculates how many cubic feet of air it should take to get there, if it does not you got no AC.

For those interested there is a resistance to temperature chart for testing the ECT. Here is a part of it.

 

Good information. Thanks