Found my dads original 1971 duster!

Teflon tape on the temperature sensor should not affect it's operation, and removing all but guarantees that it will leak. The sensor should be available from an auto parts store, and the radiator cap may not be working properly. It appears to be a 16 lb cap, which IIRC is correct, but it may be defective or it may just be doing what it's supposed to do. Are you seeing coolant releases from it as well, I can't remember if you have a coolant recovery tank or if it just goes to the ground.