Yep. You got a bad motherboard. RMA it. If the second one is bad, screw that model and go look at others. Don't trust PC Chips, ECS, or offbeat brands nobody's ever heard of outside Hong Kong. It also looks like NewEgg has it listed as "deactivated". That's usually bad. It could be out of stock, or it could have reached end-of-life and is out of production.
EDIT: I retract that motion. Send the board back as defective and buy a good board from a reputable brand. That motherboard doesn't even have good solid-state capacitors!
1. Scrape the old paste off with something like an old credit card or a similar piece of plastic. If you want you can probably clean the top of the CPU with 90% alcohol. (
NOT 70% rubbing alcohol! The additives in it leave residue!) There shouldn't be a problem if you only used a little compound.
2. Is the fan defective? (If you plug it directly into a good PSU or into the
case fan socket on a known good motherboard, does it spin up?) If it's bad, get an aftermarket CPU cooler. They're usually better than the stock Intel/AMD units anyway. There should be some kind of thermal protection system on the chip that shuts it off or underclocks it if it gets too hot (unless not including it is one way AMD cuts costs). This may sound obvious, but was there a piece of plastic tape protecting the heatsink? If so, did you remove it first?
3. Because you touch yourself at night.
You're just gonna have to cross your fingers and hope the CPU survived.
EDIT:
Jongamer wrote:as far as I know Soutbridge controls all I/O peripherals (Minus the GPU which goes to the Northbridge)
Right. Northbridge does GPU and memory controller (on pre-i7 Intels), southbridge does most of your I/O (USB, LAN, serial, parallel, FireWire, etc.)
Should have just gone with, either a Gigabyte, ASUS, or MSI (or EVGA or Intel*) board.
* I added that part. Yes I know Intel chipsets don't work for AMD processors, but they do make quality motherboards.
THIS. I don't care what the reviews say. Cheap Chinatown motherboards will always be cheap Chinatown motherboards. Take it from someone who's been there. (PC Chips P23G. Worst. Manufacturer. Ever.)
EDIT: Can you post a picture of all the parts loaded in the case? From the looks of where the CPU socket is, your cooler will wind up right underneath the hard drive tray.

No airflow + maybe screw protruding into the fan area = George Foreman grill.
Yet another EDIT:
http://www.newegg.com/Product/Product.a ... 6813131324
http://www.newegg.com/Product/Product.a ... 6813130174
http://www.newegg.com/Product/Product.a ... 6813128341
http://www.newegg.com/Product/Product.a ... 6813141011
Night of the Living EDIT: Looks like you're not the only one with that problem:
Some user on NewEgg wrote:Pros: Will run Phenom 9850 for about 5 minutes!
Cons: Will not run 9850 for 6 minutes. Overheats with stock fan and after market fan. Will only run Corsair Balistix pc 800 RAM at 533. ACPI errors loading Windows XP Pro with Phenom. Will not update bios in Windows with dual core installed attempts to with Phenom, but overheats before completion. Random boot lock ups running cooler dual core. Will not transfer files to 8GB flashdrive, no problem with smaller drives (8GB works on other computers)
Other Thoughts: Returned first board as DOA. This board would be perfect for a used car salesman, he could sell it to you. No support from Asrock.