Don't feel bad, you can cook food on it
On a more serious note:
-Having your case sides off is a bad idea, a very bad idea. When the case is closed, the fans inside create an air current contained inside the case which goes in a general direction to cool the components and then is exhausted out. If your case sides are off, the air current inside can disperse and go out of the case before it cools the components. It also depends on the case and other variables but generally, my advice is keep the case side closed.
-Next, to make sure your heat sink is properly secured, turn your computer on its side. Gravity will tell you if the heat sink is secured. If temperatures drop while its on the side, it means the heat sink has better contact...hence gravity. Then you'll need to find a better way to secure the right way.
-Try replacing thermal paste and make sure you put it on right. Buy something high quality from a brand and get instructions online to put it on right. It can make a difference.
-I don't weather intel's 775 socket CPU's have this but the i7's have something called turbo mode where it automatically overclocks itself when stressed to increase performance. Maybe this is your problem.