I am runn ing bios 17, the reason I asked is some of the older bios versions had problems reporting temps to high but 17 seems to have fixed this.
to learn how to tell what bios you have
I discovered it was very simple to oc 2500+ to 3200+ on KV7 by just selecting 3200+ (400) in the BIOS, instead of 2500+ (333), and increasing vcore to 1.775V.
You can also oc in smaller steps by setting the cpu operating speed to "user define" and changing the cpu fsb clock.
Raising vcore will raise the cpu temp but you do need to do this when you oc, you will need more case fans to oc to 3200 speeds, it is important that you keep your cpu temp under full load below 60c.
In my KV7 rig I have 80mm in rear blowing out, 80mm in front blowing in and a 92mm in the side blowing in. This along with a thermaltake volcano 12 and artic silver5 keeps my temps below 60c when at full load although my oc ain't quiet that high.
here is a guide about proper airflow and will also show you how to install and cut fans into the side of your case airflow
Sounds like you installed the artic silver correct but did you remove the old thermal paste with isopropyl alchol, also artic silver has a install guide on ther website but if you spread it as thin as possible you will be ok.
I would start by adding case fans but you could also run with the sides off for awhile to see if that lowers the temp at all.
Well thats all the suggestions for now if you have any questions/comments post back