our cruising altitude was FL320 ...
GPS altitude showing 33770 ( varying +/- 100 feet ) and the ISA DEV was +5c .
So you'd expect an underread of about 2% or 600 ft. If the QNH were 1033 hPa or so (you don't say where you were), that would account for another 600 ft.
The correction for ISA deviation is based on the average deviation of the column of air below you -- it's possible that the average was more than +5 degC. A deviation of +10 degC would account for most of that.