1) Since you already have the thermo housing off, just remove the thermostat entirely, then try it again to see what happens. Start the car (engine cold) with the radiator cap off. Look down the neck, is the water circulating? If it is, you know the water pump is working, and the impellar hasn't slipped.
If you already put the thermostat back in, start the car with the engine cold, radiator cap off. There should be no water flow (looking down the radiator neck) until you hit the temp on the thermostat. If you have pressure immediately, then there's a breach from a combustion chamber to a water passage.
2) Does the car idle and run ok BEFORE the engine temp gets to 250? How is it under full throttle? Any pinging or knocking? Your timing could be WAY off, causing the engine to run hot.
3) Is your vacuum advance hooked up? If so, is it hooked up to full or ported vacuum? If you're hooked up to full vacuum, what happens when you pull the vacuum advance hose off (plug the vacuum outlet at the carb)? Does the idle drop? Just making sure your vacuum advance is working.
4) If you don't have one already, get an adjustable timing light, pull the vacuum advance hose off (plug the carb fitting), and rev it to 2500 rpm. You should have around 35 degrees total advance. If you don't, then your mechanical advance weights/springs could have binded, or are not working properly.
5) Finally, if you've already done all the aformentioned timing checks, and everything appears normal, ignore the timing light for now. With the car idling, turn the distributor until you get the highest idle (don't go to the point where you start to hear a miss, that's too far). If you've moved the distributor pretty far from its original setting, then your harmonic balancer ring may have slipped, giving you false timing marks.
The rest of your system sounds fine. Since this is a case where it hits 250 degrees, and isn't just the normal "it runs a little hot" deal we see so often with our Pontiacs, I'm thinking it's more of a timing/distributor issue.
I think the first step though is to make sure you're getting coolant flow through the radiator (test #1 above).
