If you have to drill new holes, try to get them as close to the level of your cooking grate as possible.
I had the same problem with the temp guage on my charbroil silver. I bought a 16 dollar dial gauge somewhat similar to the one you pictured, but not exactly. My charbroil came with a 3/4 inch hole already in the door, but 2/3 of the way up to the top of the smoker. I didn't have very much sucess either with my first few smokes. I actually had the reverse problem. The dial read 225-250, while the temp at grill level was way less. Butts came out dry and tuff, and almost black from the lengthy cooking time. I bought a cheap "puck style" thermometer at Miejers for about 5-6 bucks. I guess its a baking therm, I just sit it on the cooking grate right next to or in between my meats. I was suprised at the difference of temp. When the gauge on the door said 250, the actual temp at the grate was more like 150-175.
After utilizing this cheap alturnative to the digital remote models, I quickly learned that if I kept my door gauge at about 300, the cooking surface temp was 225-250.
That was a few smokes ago, before I came here. I had read about the firebox baffle, and had some of the same problems with the ribs or butt closest to the fire was getting done too soon, and well done( almost black). Just moved the meat farther away and suffered through it then. But then my smoker could really only hold about 2/3 s of its capacity.
Last week, I took one of the crappy old baking sheets from my cupboards and cut off a 4" wide piece, leaving the lil handle and bent up edge that comes on it to keep it ridgid. I sheet metal screwed it to the small 1" flang that is bent on my firebox at the top of the hole leading into the cooking chamber.
What a difference it made. No more scorched butts, and the temp stayed alot more stable for a charcoal grill.
I hope to purchase one of the fancy type remote therms that some folks are using, but we'll see when that happens. For now I am very very pleased in my last couple of smokes.
Thise site
ROCKS!