Can you measure both the heatsink contact base and the peltier size? I believe mine are exactly the same size, and I think that if the peltier is bigger than the heatsink base it isn't going to work as well.
You have far to much heatsink compound on there. Between the hot surface and the peltier it should be a thin layer. The compound is only to fill voids/gaps not actually be a thick blob on the surfaces. Also, the surface of the heatsink should be the same size or a little greater than the peltier. I'm in the IT business and it's the same rules with processors.
Thanks, I'll try to reduce the amount of thermal paste. I initially put a lot on there because the way the heat sink is built keeps it from being screwed down tight on the peltier. But I've ground down the posts now so that that's not a problem.
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