maybe mobo.. 350 fsb normally ok..
try raise mobo voltage..

1.35Vcore is set in bios or show in cpu-z??

3.5Ghz use 1.35V is quite high IMO..

wat fsb u using?

try pumping up some vnb/vmch.

1.35v or something near to it.see if it make any difference.

In the class of P35, the abit doing pretty good in OCing, but it has a rival in competition:
DFI Blood Iron P35-T2RL 
Price: RM340@ LYPlaza.
These two board has always been competing with one another..(equivalent to the rivalry of Subaru impreza WRX sti vs. Mitsubishi Evo)  
But this was back years ago, its just up to what u prefer...
The abit is better looking, but the DFI may look simple, but it got tricks up its sleeves.
pic:
http://www.tweaktown.com/popImg.php?img=dbll_5.JPG

As for your mobo, the msi p43-neo 3 should have no prob OCing the E7400 more than 3.6ghz.
Most E7400 can run 3.5ghz@ stock vcore/"automatic", 1.35v is in the region of 3.8ghz-ish. (hell some chip can run 4.0ghz on that vcore.)

The real power of CM Extreme 460 is about 435w, hope this is enough for OCing
U can calculate the Watts usage in your entire system here, just in case:
http://extreme.outervision.com/psucalculatorlite.jsp

What the temp of u'r E7400? Do you use after market CPU coolers? One thing i can thinks of right now due to insufficient info:
The cpu might reached a certain Autoshutdown when reached TJMax or BIOS auto shutdowns when cpu temp reached 90c plus(or what the bios specifies)...

333 x 10.5, are using 677mhz rams? Btw, is your 'FSB to Northbridge strap' set to 333 as well? need a little more info bro

i did try running 333x10.5 with auto Vcore, tat shoots up to 1.31V shown in cpu-z.. 

as i mentioned earlier i set my Vcore to 1.28750V to get a stable 333x10.5..

do u remember how much is yr voltage when u set it auto?

are you sure your +12v is 10.++v? it's too low i think..it should be 11.4v-12.3v....

what i know la..+12v rail is for psu stability...more +12v droop mean not stable..correct me if wrong opinion about this...

p/s: what is your psu using right now?sometimes the software give wrong reading..better check in your bios...

There's two version of CM Extreme 460; one is the one u'r using currently and 2nd is the newer one : CM Extreme 460 Plus
the 'CM460 Plus' has revised railings for the +12v since the older version has encounter lots of problems in term of railings and low true power output..
as low as 430w-ish of true power if i remember..

Yes your +12v is pretty low, should be at least 11v minimum, 11.4v average.

from my experience bro..actually i'm also using E8400 E0 stepping also but need high Vcore (1.38v) to make it stable at 4.0ghz  ...if you can see majority E8400 E0 stepping can do 4.0ghz with 1.28v without problem...even i used TX750W psu...so it's depend on your proc & luck also...

If its Exreme power plus, then the problem might be elsewhere.
(i'm not an electrician, but u'r +12v is STILL pretty low, probably i'm just wrong about the CM 460Plus,
maybe the CM460Plus hasnt improve much on its railings... hope any other CMextreme+ users can clarify me on this)

But of course still cant ruled out the possibility of PSU insufficient power output.
I think you should try very troubleshoot possible before deciding to buy new PSU's,
but if u got the $$$, a new PSU is somewhat recommendable and a good investment in the future u want to upgrade hardware bro

3.65ghz, whats u'r FSB now??? If its 400 and slightly above, then its good when running with DDR2 800. I think when u were OC'ing @3.5ghz, u downclocked u'r DDR2 800mhz DRAM to 678mhz-ish, which i presume might cause some instability. Maybe all these time the problem has to do with the Dram freq., not the Vcore because E7400 @3.5ghz does not really need to be push up to 1.35v...(maybe those unlucky chips might have to)

When u'r using DDR2 800, its recommended to OC u'r CPU to: (IMO )
3.4ghz (400 x 8.5)
3.6ghz (400 x 9)
3.8ghz, (400 x 9.5)
4.0ghz, (400 x 10) 
etc..........
^^^This is a common baseline for overclocking CPU with DDR2 800. (without needing to OC the DRAM) Later u can fine tune...
      And as a bonus you obtain the FSB to Dram ratio of 1:1 

With the FSB maintain at 400,(or slightly above) u dont have to overclocked/downlocked u'r DRAM frequency.
When OC'ing DRAM, usually need to alter the DRAM voltage or choose a compatible settings for 'clock twister' for stability. 
e.g.  my DDR2 is at 820mhz(410mhz)@1.9v; or 840(421mhz)@2.0v to remain stable.
But right now i'm on stock 800(400mhz) @1.8/AUTO.

Yeah the amps of the railings u cannot do anything about it once you bought a PSU.
But i think u'r PSU is good enough when u are currently using 9600 GT.
(FYI, 400w of real power and 26Amps on the 12v rail (combined) is more than enough for this card)

HD4850, 4870, 9800GT, GTs250, etc.. has drop its price significantly these days, just FYI if u'r planning to get those GC,
u at least need PSU with 500w+ of real power; 600w+ real power for SLI and C.Fire 

Anywayz, try playing around with those settings i recommend above and report back bro,
bcoz these are valuable data/info for all other E7xxx users to read. 

Man that's unlucky It's the mobo...

ABIT IP35-E is RM350 brand new @LowYatPlaza, The DFI i reccomended earlier is RM340 @LYP. If u got the cash, there's another P35 mobo, buts its consider expensive if u'r in a budget:
MSI MS-7345 P35 PLATINUM (2 PCIE=Crossfire) @RM490 LYP.
pic:
http://www.hardwaresecrets.com/fullimage.php?image=7419
Its doesnt always have to be P35 bro, u just need to find another P43/P45 mobo, e.g. like Gigabyte EP43-UD3L, Asus P5QE,
Jetway JXBLUE-P45(this one fetured in Goldfries's review on OCZ 1.2ghz in GameAxis magazine) Asus P5P43TD (DDR3), Biostar TP 43,  etc...
(all the mobo above budget less than RM350)

or if u feel lucky u can go hunting in LYN garage sales for a bargained price