Bad thermo or needs adjustment?

[Bigtonka]

Over the weekend I picked up a complete refrigeration unit for my V39. 

I bought it off of a member here, and it works fantastic.   Previously I had picked up a new thermostat for my original system (which never cooled longer than 12hrs) 

I picked up this guy: http://www.fun-tronicsllc.com/index.php?crn=338&rn=608&action=show_detail

I have it mounted directly to the evaporator side.  For the first startup test, I set it to the warmest position, 1.  I happily enjoyed watching the machine drop temp rapidly.

After 25 minutes the machine hit 32 degrees and finally shut off.  Between the evap and the sensing unit, there was originally installed a piece of "fibreboard".   I thought perhaps it was providing too much insulation, so I removed it.

Now it shuts off at 33, and kicks back on at 39/40.

This doesn't feel right to me at setting number 1.  I'm wondering if this thermostat is bad, or should I just the adjustment screws on the back to raise both temps respectively. 

Thanks,
Mark