Yes, that is the engine compartment temp sensor. The DME reads the actual temperature, and has preset programmed temperature limits, when those are exceeded, the fan runs until it drops down in temperature.
It sounds like you need the eprom code for a newer 996/986 cluster. I have my code saved and would be happy to share it. If so, just send me an email to tonysikes@me.com and I will respond with the code.
