A two dimensional (2D) percolation transition in Fe/W(110) ultrathin magnetic films occurs when islands in the second atomic layer percolate and resolve a frustrated magnetic state to produce longrange in-plane ferromagnetic order. Novel measurements of the magnetic susceptibility χ(θ) as the films are deposited at a constant temperature, allow the long-range percolation transition to be observed as a sharp peak consistent with a critical phase transition. The measurements are used to trace the paramagnetic-to-ferromagnetic phase boundary between the T = 0 percolation magnetic transition and the thermal Curie magnetic transition of the undiluted film. A quantitative comparison to critical scaling theory is made by fitting the functional form of the phase boundary. The fitted parameters are then used in theoretical expressions for χ(T ) in the critical region of the paramagnetic state to provide an excellent, independent representation of the experimental measurements.