25D's are difficult to get the air out of. You have to pull the bleeder out of the passenger top of the radiator to let out the air as you fill. Then they typically work fine. You MUST use an OEM thermostat, and quality water pump that has close enough tolerances between blades and housing to efficiently clear the air pockets. Being this is a 96/97 25D there is also an extremely high head gasket failure rate and the more you mess around with it and overheat it, the more likely that becomes.
It also helps, once you get it warmed up, to use a fill funnel to get the level higher than the engine bay, and then rev it up to 5k rpm repeatedly till the thermostat opens and the air pocket clears. Make sure you get the oil up to temp before you start revving the beans out of it. That's how we clear the air on all of them. 50% of the time it works 100% of the time.
GD