I would like to drill/tap into thermo housing to install 1/8' npt temp sending unit. The tap location with most clearance is the round "waterneck" inlet.

Q:

1) Would the cast alumunim of the thermo housing inlet be thick enough to drill/tap, or is it too thin & no allowing for enough treads.

2) Has anyone done this modification?

 

What car are you working on? Pics of the prospective site would help.

 

I would TIG on a bung.

 

It isn't technically thick enough. It can be done if you make sure to only run the tap partially down. Since everything is tapered the further you run the tap the further you need to thread the sensor. With all that being said you run a very high risk of leaks and cracking the housing. Only try it if you have a spare housing to experiment with. Otherwise you best bet is to weld a bung.