The internal combustion engines of long-endurance UAVs are optimized for cruises, so they are prone to overheating during climbs, when power requests increase. To counteract the phenomenon, step-climb maneuvering is typically operated, but the intermittent high-power requests generate repeated heating–cooling cycles, which, over multiple missions, may promote thermal fatigue, performance degradation, and failure. This paper deals with the development of a model-based monitoring of the cylinder head temperature of the two-stroke engine employed in a lightweight fixed-wing long-endurance UAV, which combines a 0D thermal model derived from physical first principles with an extended Kalman filter capable to estimate the head temperature under degraded conditions. The parameters of the dynamic model, referred to as nominal condition, are defined through a particle-swarm optimization, minimizing the mean square temperature error between simulated and experimental flight data (obtaining mean and peak errors lower than 3% and 10%, respectively). The validated model is used in a so-called condition-based extended Kalman filter, which differs from a conventional one for a correction term in section prediction, leveraged as degradation symptom, based on the deviation of the model-state derivative with respect to the actual measurement. The monitoring algorithm, being executable in real-time and capable of identifying incipient degradations of the thermal flow, demonstrates applicability for online diagnostics and predictive maintenance purposes.