As far as I can see, the 4A-GE uses a reduced volume bypass type
system for rapid warmup. When cold, the thermostat is closed. The
pump circulates water thru the engine and past the wax pellet side
of the 'stat, but not thru the radiator.
At about 80 deg C the 'stat begins to open, allowing water to start
to flow thru the radiator. During normal operation the 'stat will open
more or less, to maintain an engine temp of around 90 deg C.
Where the thermostat is located is not particularly important, so long
as you have a partial bypass arrangement. The wax pellet side of the
'stat must be able to taste the temperature of the water circulating
thru the engine
while the 'stat is closed.
Hot water rises, and cold water stays at the bottom. If you locate
the 'stat in the bottom hose, and you do not have any circulation, it
will never open and allow water to flow to the radiator. Just make
sure you rig up a bypass hose
Cheers..... jondee86