Your cooling system is quite nice, but why not add an excellent water block? The one you're using is just OK but really is outclassed by the rest of your components IMO. I wonder what your TEC hot side is? As long as you can maintain under 50C on your hot side of the TEC it should continue to cool. 32c to 37c is a really good temp differential so it does seem like your WB is moving a lot of heat. Lets assume that's not the problem. Finally, for voltage it's pretty good practice to keep it below 80% rated TEC voltage so up to that level you're OK. With fatigue your PSU could be experiencing voltage drop. Hook up a multimeter to make sure it's not dropping out because as the TEC gets hotter it will draw more amperage. This could explain the heat rise.