FYI, it was indeed a motherboard issue. The CPUs were fine. Swapping out with another motherboard (and make) solved the issue.
Question remains, is there a more efficient heatsink than the STS100A for dual 1366 motherboards?
It is very unlikely to have two cpus faulty, besides over-heating is not a problem due to faulty cpus.
Here are the lists of compatible intel boards that work with the cpu, there has been any issues like that on any boards.
Try to check with the board manufacturer.
All the best,