As the proud owner of an E8400 since march, all I have to say is, YOURE DOING IT ALL WRONG!
Please take that lightly though, because I'm going to show you what to do.
First off, read this online article about overclocking Core 2 Duos: it's the best guide online.
http://forums.overclockersclub.com/index.php?showtopic=71656
That will give you a good overview as to what you should be doing.
Now, for making your E8400 run at 3.6GHz - its really easy, I nailed 3.6 on the first try. Now, im at 4.0.
Multiplier:9 - I've seen people get fast numbers by running a low multiplier, but frankly, just don't do it.
Ram speed:400Mhz
FSB: 400MHz - it's important that the ram speed and the fsb are matched. Assuming you bought DDR2-800 ram, this should be a snap.
Vcore: 1.25 - this is the stock (as in, out of the box) voltage for the E8400. 1.128 volts? You're under powering it significantly, making it a huge risk for being unstable.
PCI frequency - 100MHz. The stock frequency. But worthwhile setting.
Your ram: go to the website of the manufacturer (give me the model, and Ill even look it up for you
and find the stock voltage ( example: 1.8V) and the timings (ex: 5-5-5-15). Oftentimes, the ASUS bios will automatically set the RAM to a voltage that is too low to be stable, and then sets the timings slower than they need to be (lower, the better)!
set these basic settings, and it should work perfectly, with no problems.
Overclocking, once you get the general idea down, is a LOT of fun. Heres some things I might suggest you invest in:
A larger cooling fan. If you ever take it past 3.6GHz (which your E8400 will run forever, BTW), I suggest getting something other than the tiny aluminum fan Intel ships with these. I bought a Zalman 9700NT, but since then there are more smaller and more efficient coolers now. Read some more, look around.
I don't know what Ram you bought, but its the other bottleneck on the E8400. Instead of DDR2-800, I suggest DDR2-1066 if you want to crack 4GHz. G-skill is cheap and good (with no silly mail-in rebates, if you hate those), but the best ram going right now for you IMO is Corsair Dominator and Crucial Ballistix.
Hope all this info helps. I learned it the hard way.....lol