What year duke are we referring to?
If the computer thinks it is -35 degrees, then there is an issue with either the temp sensor, the ECM, or the wiring between the two.
First, I would test/replace the temp sensor (ECM sensor, not the fan or gauge sensor). If that doesn't solve it, I would pull the center console and check continuity between the sensor and the ECM. If that checks out good, then swap the ECM (after all, you are already into the car that far, that is an easy next step).
You said it goes away when it warms up. Is it really temp related? Or does it go away when the car goes from closed loop to open loop?
Edit to add...My first though was the ground wire to the sensor. On an 84 (don't know if it is the same on other years), that is the same ground as the TPS sensor...which would explain the warm issue too. But....if this was the case, you would most likely get a code 22 (TPS low voltage).
Edit to add again...If it were a coolant sensor issue, you should be getting a code 15 (coolant sensor high voltage) if it is giving a reading that low. So...next thought is the wiring issue (I think no signal from the temp sensor would be read as -35)...but I would then expect a code 45 (O2 rich). Hmmmm....I am thinking your mechanic may be right...but I would still troubleshoot in the order I listed earlier.
[This message has been edited by CowsPatoot (edited 07-19-2013).]