Hi Toby! I feel your pain! When I got my GOSM 3405BGW I had the same problem, it wouldn't go below 250* and the temps were all over the place using it as the instructions said to. A few mods later and it is performing wonderfully.
First I quit using water in the pan, I filled it with play sand. This really helped with the temp fluctuations. I still put a disposable foil pan in it right on top of the sand pan with some water to catch drippings.
Next I installed a needle valve and with that I could get it down to about 185*.
http://www.smokingmeatforums.com/a/needle-valves-for-gassers
I wanted to start smoking jerky in it and I needed to be below 170* so I took the burner from the side burner on my gas grill (it is about 1" smaller in diameter) and replaced the GOSM factory burner with it. I can now maintain a consistent 135* up to over 300* with no problems or big temp swings.