It just sounds like a crap heatsink: Massive, 1100RPM and still running hot?
Get a proper, yet inexpensive one, like the CM TX3, Hyper 212 or 412s
I would agree with you, except for:
I think the fan should spin faster - When I first boot the computer, it spins extremely fast for about a second before settling down.
This really sounds like a problem with the fan speed control on the motherboard. If it is running hot, the fan should be spinning up.
Or maybe the 70C reading is incorrect. @suicidemonkey - What are you using to read that 70C temp, and is it in general agreement with the temps reported in the BIOS? (Yeah, you can't really look at BIOS temp readings with the CPU under load, but you can at least verify that the temperature readings are similar at idle.)
If the world isn't making sense to you, you're either drinking too much or not drinking enough.