Couple things that come to mind when looking at your setups.
Cato, you're only recirculating the bottom portion of your mash. I'd really worry that if your temp probe is near the bottom that you dont have consistant temps throughout the whole mash. Heat rises, so maybe I'm worrying about nothing, but it does have me thinking. It is good that you're able to leave the lid on as that will retain heat.
Horsepuncher, leaving the lid off due to your mounting apparatus contributes to a ton of heat loss. I'd also worry about channeling with using a
Loc-line. All the wort flow is going back into that one spot. I'd try to make sure that your wort flow is just a bare trickle and there's a good inch or two of water above your grain bed.
I agree. The return hose needs to go to the top of the mash. That’s the only way you are truly recirculating.