You could also put a PID temp controller on it and turn it down to the point where it doesn't overheat. But steaming would suffer.

Also there is a serious limitation to how low the boiler temperature can be, because the water needs to be hot enough when it enters the space below the piston so that its vapour pressure will drive out a large portion of the air in this space. If it should fail to get rid of most of the air the shot will extremely "spongy" and have ridiculously low volume.

Remember that espresso making is really chromatography. Higher temperature means shorter retention times. If you make the first shot with about 13 grams, and make the second at about 15 grams, and the third at about 17 grams the increasing temperature is largely compensated for by the deeper puck. (You may also have to grind slightly coarser.) What you really are trying to do when making espresso is to separate most of the bitter late eluting components. Shots from too hot groups are not "burnt", but they taste that way because of the burnt taste of late eluting components that hot water elutes in greater quantity. To make these larger shots you will need MCAL baskets. After the third shot one needs to use one of several cooling routines.

(I have to confess that when I am making more than 3, I almost always make them with the Microcasa a Leva! I also have a routine for making cappuccinos with the MCAL that works wonderfully. I almost never use the MCAL for one or two shots. The 2nd generation La Pavoni does them in half the time from a cold machine, and, with proper care, a bit better.)

Right now I think I can handle a little more heat to the group, and I do need steaming. So there's little need to PID this one.

The pstat is currently set to a high of .75 BAR with .65 BAR being the low, so I might raise the pressure slightly to see how that works out. If I remember I'll make that pstat change before plugging in tomorrow and see how it goes. I'll have to dig my good pressure gauge out of a box for testing that too, as the old La Pavoni one on the machine isn't reliable enough for tuning the pressure and documenting changes.

Can't find my pressure gauge... The problems with living out of boxes post move.

Anyway, I made changes to the pressure. It now tops out at around .9 BAR with .75 BAR being the low. Temps in the group have gone up about 2 C on average, and there is a marked improvement on shots I think. I'll have to grab different beans tomorrow to see if they pull better. I'm thinking a little more pressure might work okay too, so I might tweak that a tiny bit again.

The group is so temp stable now that I don't even pay attention to the digital readout once I have the group heated thoroughly. There's about a 2 C fluctuation in temps as I pull the shot, but the rebound is pretty fast. No shots are yet being over extracted, and no boiling coming out of the PF currently. (I only have a bottomless PF for this machine.)

Getting more stable and temp correct all the time.

The plastic seal on the back of the group has worked nicely. After a period of time it did weaken, so I custom fit a stainless washer (drgary suggestion) to it as a backing and kept it in place for several weeks. It was a good method of controlling the group temp.

NOW I HAVE A NEW HEAT CONTROL METHOD. SATURATED GROUP IN ACTION.
Taking a hint from rpavlis's post I ran across this part for $5+ on theespressoshop:

This part is for the La Pavoni lever v3/Millenium group. Theespressoshop measured the part for me, and I decided to order one and fit it to my v2 pre-Millenium model.
Once the part arrived I attached a bolt through the center, put that in a drill and then used a file against the spinning part to cut down the threads and the part size to fit the back of the group exactly. It was a very tight fit, but a bit of tapping put it right into the group. The existing dipper tube fits the back of that part, screwing in as usual.

Worked, but it failed... The part, after heating up, seemed to loosen and only stayed in place for 1 session. It worked great though.

Back to modification I used a round file and with the spinning part in a drill I cut 2 grooves for o-rings. It took some persuasion, but after some work I got the part back into the group and have been using it a few sessions without any problems. Seems very solid in the back of the group right now, so I hope it stays that way. A lathe should be able to do all this much easier.
Increasing the boiler pressure to 1-1.1BAR I can get the narrow front of the group to 100+c with a few pumps of the lever and watch it slowly drop to 90c if I want a lower temp. With the boiler pressure at .75 bar my max temp was around 96c. The outside flare temp is about 7-10c less than the narrow of the group, so shots aren't overheating even at 100c it seems.

The main drawback to this is that I'll probably always have group thermometry in place to use it effectively. Then again I'm pulling 8 back to back shots without any problems, so I'll accept that as a requirement for now.
Today's experiment with the higher group temp of 100c was better than yesterday's 95c max shots which were a little sour. The naked PF goes in at room temp, so it's likely helping to keep the shot from overheating too. I'm pretty happy with the new modification and temp stability, and feel it's better than the previous plastic steam seal I used.

Very interesting experiment. Did the steel part fail?

double reply

No parts have actually failed so far, although my first water heated group plug didn't hold = experiment failed. The plastic water bottle cap did flex once warm, so the stainless steel washer was used as a reinforcement backing to that. It held up fine though.

The plastic group insert slipped out of the group once it heated and cooled one cycle, but it's been holding fine since I fitted the o-rings.
Now instead of the steam heated group I have a water heated group. Perhaps a little closer to the Millenium machine design in that way.

So, as a practical matter, is the stainless washer easier to implement?

That is much easier to implement. Just a washer one size too small and filing/drilling out the hole to fit the dipper tube exactly, perhaps a non-conductive plastic washer on the group side to limit heat transfer with a small hole in it for ease of lever movement. Almost as temp stable as the saturated group too.

I'm just a glutton for punishment and think I may like the hot water saturated group better. Although, if the new fitting does start popping out I'll probably go back to the washer arrangement and still be happy.