I have a 1996 Mercury Sable and it did the same thing. The fix was a new transmission. My mechanic noticed that the car was running higher RPMs than it should have after replacing an engine that blew a rod through the engine because of the bad transmission.
The rise in temperature causes the mercury atoms to collide with one another more often, and with more forceful impacts. This increased activity causes an increase in the volume of the mercury. With no where else to go, the column of mercury rises higher in the thermometer.