So I got my oil temp gauge installed and took it for a test spin. It's a little over 90 deg. out and after an hour cruise it was hovering around 220 with 260 being the next temp number on the gauge. What the normal range and where does the danger zone begin

I've read 200 deg. at a minimum to burn condensation so I think I'm looking good.

I meant the oil temp

Where is the sender? Temp is essentially meaningless without knowing what you're measuring... Did you calibrate the sender and guage assembly in boiling water before installing it? 220ºF sounds hot for just driving around, but not very alarmingly so. But I get alarmed at 230º so you need to verify your calibration and understand what you're actually measuring. Is this a dipstick sender? Taco plate? Something else?

Sorry - myth. Water will evaporate just fine at room temperature _if_ it is exposed to air. Oil thrashing around is exposed to lots of air. That said, I like 205-210º as an operating temp, especially with good oil (and why would you not use good oil?) but some like to see less. Water _will_ boil out of the oil over 212ºF whether or not it's being thrashed hard - which means your breathers better be able to handle the boiloff steam.

Sender in in the stock 2.0 Taco/sender plate. It's a brand new VDO kit, Gauge and sender and I didnt boil it to test, Maybe if it was and used setup I would have. I'm running Mobil1 10/40

90 deg. outside and runnign 80 mph on the freeway

Mine gets up around there too, I also have the stock taco plate from a 2L car, it starts up cool and when I sit at lights it slowly builds up to around the 220 mark...I recently installed my new quad gauge and its also very hot here in Japan like 36 degrees celsius (not sure in F but hot)...it takes about one hour or even less to heat up that way but has never gone over 230 or so...I would think 200 is a good mark...if you feel its getting hot, maybe a good idea to just pull over and take a break for a bit and grab a drink at the corner store and usually things cool down.

I have been thinking about adding an external oil cooler but am not really sure if I actually need one

36 degrees celcius, double it and add 30 and that will put you in the F ball park. About 102.