Your arrangement of vents looks fine, quite normal, the thermoemeter is about right for a side reading setup, bear in mind, it will read different from the center of the grate. The basket looks okay as well, I see nothing wrong with the UDS itself. I am gonna guess you are not managing the fire right.
I do use lump in my UDS, it can burn out funny if not stacked right, you can't just dump it in. Some guys do, my UDS doesn't like that. It likes the lump stacked in sort of flat and tightish. I light 8 to 10 medium sized lump chunks until fully lit, dump on top and set two vents open. As the UDS approaches my goal heat, I shut one vent down by half and wait an hour to see what happens. Once stable, 1 to 2 hours later, add the meat, the temp will drop. I leave the vents alone for an hour, then adjust if temperature has not come back up. Small adjustments.
me: I don't drink anymore
Yelonutz: me either, but, then again, I don't drink any less