One point which seems to have been missed here is the possibility that the lockups may be being caused by "brownout" (one or more of the PSU output rails dropping momentarily). From what CBLong has said so far it seems clear that the PSU is heavily loaded (& possibly overloaded) so it is conceivable that under certain circumstances it drops out for a fraction of a sec. In fairness though I would think you would notice this from the sound of the fan changing but I think the point is worth raising anyway.
Cbl, is the PSU fan now extracting air (ie does it blow towards you when you are behind the PC)? This is how it normally should be.
Out of interest, as the point was discussed, the thermal drop between the heatsink and processor topside is normally negligible (less than 0.1 deg C) compared to that between the it and the silicon die within, not to mention the difference between heatsink and local ambient air temperature. Hence even a 10 fold improvement in heatsink compound effectiveness does not really count for much if all else is correct. (The soft "spongy" heat transfer pads used by some systems are somewhat less effective though).
I would always be concerned over parts within a computer which were too hot to touch (ie much over 60 deg C). Whilst semiconductors can generally operate up to 150 deg C (actual silicon temperature) reliability suffers badly, also thermal "runaway" can affect certain components - this is when the device heat dissipation actually increases with temp' (due to physical phenomena) to the point where the cooling arrangements are inadequate and the device is destroyed.
Fujiflyer
