No
No, the thermal paste won't give you a bad reading.
Trust the temps you see in the Bios, then find a monitor which accurately reflects those. MBM5 lets you adjust the displayed temp, if it is consistently off by a set amount.
Another thing to keep in mind is the location of the sensor itself. My Asus A7V-133 comes with a disclaimer saying that the temps you see will seem higher than usual. They say that this is because the sensor is mounted closer to the CPU, and therefore is more accurate. I wouldn't worry about it, if your system runs fine. If that's the case I would just use the temp readout as a baseline for monitoring future problems. In other words, even if you know the temp is not accurate, just watch it to see if there is a sudden rise.
One other thing to remember is that a reading which is totally out of the realm of possibility probably means that the sensor is either not on the board at all, or you have your monitoring program set to the wrong sensor. I had one board which had a sensor reporting a temp of -137C. That would be wicked nice for OC'ing (were it true) but as it turned out, the sensor wasn't there at all.
Prof