
moolie! It does make it easier to keep the water confined in jars, doesn't it?
mrscoyote, moolie has given good directions; its how I have done it for years. One thing to remember though ... sometimes it
just doesn't work! For some reason, barametric pressure, the phase of the moon, whatever it might be, it just doesn't do what it is supposed to. Various suggestions for that - first and foremost, don't give up! Try again. You might also want to try another purchased yogurt starter (either a commercial yogurt that you like, and that has LIVE CULTURES, or powdered starter [I have used some from
http://www.cheesemaking.com/ with good success; kind of pricey, but you can keep one packet's worth of culture going for a long time, as has been described in earlier threads]), and try another dairy's milk.
If you are more comfortable with numbers than moolie's descriptive methods of temperature taking

(and I know some people are) then heat the milk to 185-190F, and cool to between 125F and 110F. As to the temp inside the cooler, don't be concerned about it; just make sure the top is on tightly, and check every 3-4 hours that the hot water jars are still hot.
Good luck!