The others are probably right that you've exceeded the laptop's cooling capability. But before you give up, try cleaning out the cooler. Give it and the fan a good blast with compressed air to clear out any dust. Then try re-pasting, making sure you really squash it down to maximize metal-on-metal contact between the CPU and heatsink, before you screw it down.
To reduce the power consumption of an i7, you've actually got a second option. Usually there's a BIOS option to turn off hyperthreading (basically turn it into an i5 albeit with a larger L3 cache). I haven't found hyperthreading to be of much use outside of video encodes (and it reduces the occasional video stutters when watching YouTube under heavy load), while it raises my...