http://www.crowleymarine.com/johnson-ev ... /57011.cfmClosest diagram I could find, I can't look up Volvo diagrams but this is the joint venture model shared with OMC and Volvo. As you can see the spring goes DOWN pointing toward the intake manifold. The stat is held in the thermo housing by a rubber O ring.
The water flow is as follows: cold engine, the water flows in from the impeller and when the 'stat is closed, the water goes into the bypass passage in the thermo housing and then out to the manifolds and risers. The water in the block/heads stay in there and is recirculated till the temp gets hot enough to open the stat. Then the stat opens and the hot water in the engine, gets pulled out by the circ pump and mixes in with the cool water from the impeller. So at this point some of the cool water from the impeller gets sucked into the engine and the warm water coming out of the engine exits the ports that feed the manifolds. So you see the thermostat when it opens lets hot water OUT of the engine, replaced by cool water from the impeller.
The spring end has the temperature sensing pellet to open the stat, it has to be in the HOT water for it to open. If it was in the cold water supply end it would never open.