Clearly your heatsink is too small to accomodate the QX6700. You must remember yours is the Kentsfield B3 revision which tends to run hotter than the Kentsfield G0 for the Q6600. Need bigger heatsink. I'm previous owner of Q6600 using a Xigmatek S1283 heatsink . Can clock 3.2ghz easily and run linX below 70C stable. Your thermaltake heatsink look even smaller than the original C2Q heatsink (dont compare with Pentium Dual Core and C2D, its different in terms of the fan and heatsink material). Only your fan is bigger than the stock heatsink.

Using Hyper 212+ will definitely lower your temperature. Dont worry so much about the T Case thingie. Just make sure the core temperature stays below 80C. Its quite safe. HW Mon Pro is quite accurate.