I don't think the sensor is broken, I think that when the monitoring programs can't find a sensor, they display the temp as 127C, so don't even worry about it, besides, if anything in your computer ran that hot you would have noticed the first time you turned it on, with a very loud crack! hehe
Although I would typically guess the HD0 temp is the mobo, the Temp1 is probably the CPU, so I'm not sure what temp 3 is.. but those temps for those hardware items would seem normal so