i7 3770k down clocking itself to 1.6 Ghz

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I put together a new system two weeks ago and everything seemed to be working fine.

Yesterday the CPU started down clocking itself. 3.5 GHz at boot up and then very quickly down to 1.6 GHz. It is doing this even with handbrake running
To remove any software influence I put in a fresh install of Win 7 and got the same results.

Win 7 64
Shuttle SZ77R5
Intel Core i7 3770k @3.5 GHz (3.9 Turbo)
MSI R7850 2GB
16 GB G.Skill Ares PC 1600
128 GB OCZ Vertex-4
1 TB WD Black

I have been doing a fair amount of encoding but have an Asetek 545 LC water cooling loop which keeps core temperatures at ~70 C going full bore (MX4 paste)

I grabbed these images after the fresh install.

2_zps0663a017.jpg

3_zps3d4766fb.jpg



The only changes I have made my bios were to enable XMP and set the fan speed

a possible irregularity in the bios is that I can set the multiplier > 35 (OC) but if I try to down clock it resets itself the 35. I'm not sure if that is normal as I never checked it before this problem.

I have 11 days left in my original 30 day return policy. Should I send the chip back while I still can? Is it more likely the motherboard? I do not have another CPU available for testing.
 
I had to leave home so I'm on my laptop now, but I will check these things as soon as I can. This thing scared the crap out of me. Thanks for the help. I will let you know how it works out.
 
I just find it odd that things would down clock while handbrake is running full blast. Could this have to do with the fact that handbrake with a lower than normal priority? I just never saw this behavior over the first two weeks and then all of a sudden decides to do. Weird.

I'm still away from home so I can't actually work on anything, but I should have also mentioned that the computer would reduce its clock even while programs were still being loaded at startup. One of my startup programs even hangs and refuses to load even if I kill the process and try to reopen it.
 
Run a Passmark CPU test. I just had a similar issue with my 3820. I knew about the Speedstep, but it would stay at 1.2GHz during load and I was getting really bad ratings. Went and flashed my BIOS, problem solved after like 2 days of frustration. Good luck bro.