The proper temperature to get MonoKote to fully shrink is just below the melting point of the material. I usually use a scrap piece to set the temperature of my iron. When it starts to melt, I back down the temp. If MonoKote's finish is dulling when you apply the iron, it's still a bit too hot. You should have the iron just below that point.

Also, please be aware that most sealing irons don't hold a constant temperature. They cool off, then the heating element 'kicks in', they warm up, shut off, and start cooling to start the whole cycle over again. Sometimes temperature swings can be as high as 30-40 degrees F. A good iron keeps it within about 10 degrees.