Sounds to me like a heat issue which may be permenant now.
I've had this happen before with a Duron 1200. Would run perfectly for about 10 minutes, then only for about 5, then less and less until the power supply died. Replacing the power supply and the same thing occured, but only faster.
After examing the processor it actually left burn marks on the heatsink and melted some of the plastic on the socket connector on the motherboard.
After replacing the motherboard, processor, heatsink and fan, everything was fine.
Have fun with the RMA or shopping for new stuff