I have a G4200 that I swapped a D662 into and I have very similar coolant temps - in fact mine will get up to ~220°F when mowing fast on a hot day. I used the same radiator from the Z430 engine for the D662. I have a 13 psi radiator cap (from an older Honda Civic - at least that's what the parts guy said) and 220°F doesn't seem to be a problem. In fact, it probably helps engine efficiency a little bit.
This is an iron engine, and there aren't any thermal expansion issues with dissimilar metals like with an aluminum head. I work at an engine test lab and we regularly run some coolant temps as high as 240~250°F without trouble.
I did notice that the used D662 that I bought had a bigger fan on it, but it wouldn't fit with the radiator setup, so I swapped back to the smaller fan on the Z430.
PS What's the hose sticking out of the side of your engine for?
Have fun!
Kevin