Errmmmm, PGT (and pugzi), you must only correct for the depth of indicated altitude, not for the pressure altitude, so that's 3,000 feet not 3,405. You are correcting for 405 feet of sea! The PA is only used for finding the temperature deviation.
ISA is closer to 8° than 9° at 3400 feet! ISA deviation is -18°. Sorry to be pedantic, but to avoid confusion. I suspect you got your two altitudes the wrong way round in the calculation, as that would account for both errors.
Subsidence
If this was using a real QNH measured at the top of the obstacle you would be right. As it is this question uses the horrible (and incorrect) term "Regional QNH". Regional pressure setting is not a QNH at all, nor based on them, hence the military do not allow their pilots to use the term "Regional QNH"! It is calculated from QFFs*, which are corrected for off-ISA temperature. It is also probably calculated from measurements well below the elevation of the obstruction, so even using a QNH you must account for temperature between where the QNH is measured and the aircraft, not the obstruction height and the aircraft.
Hope this clarifies!
Send Clowns
*Regional pressure setting is the lowest QFF forecast in the region over the following 2 hours, and is valid for 1 hour.