OK, I just reread the entire post. I have you diagnosis. Take it with a grain of salt. I am not a mechanic but I did sleep at a holiday inn last night. You car is not overheating, just running warm (slightly above the halfway mark at times) and you have no heat.
My diagnosis is debris in the system. Your heater core is clogged by debris. Take off the lines to the heater core and flush with a hose. Reconnect and refill the system then bleed. This will solve the problem temporarily, but it will return. The debris is probably also probably blocking some of the radiator passages so flush it again.
Of a side note - in the process of tracking down my leak I replaced the water pump, thermostat and housing, elbows, LIM, water pump, heater core, and radiator hoses.
After all was said and done the car runs warmer (used to run a little above the first mark, now runs a little below halfway - it is always between the first and second mark just a little higher now (does that make sense)). My conclusion from this is that the aftermarket - read cheap - radiator I bought is not as good as OEM.
But after taking the system apart I found what people mean by dex cool causes problems. When I removed the lower intake there were places where there was no coolant flow that the coolant solidified. I suspect these pieces were getting in the system and clogging it.
