there is only 2 sensor. I hope you didn't unplug the wrong thing in the processor of trying to find something that doesn't exist.
I understand. I did not unplug and plug to random connector.
I simply re-seated the sensor coming from the heatsink in the same socket/connector as I understand this is "temp3".
It is still reporting value of 0 always. Any suggestion?
As stated it will always report 0. The sensor is not installed buy design. Get used to it dude

Why do other avalon units have temperature value output on temp1 and temp3? This is the only unit that has a constant 0 for temp3 value. And fan rpm always stays at ~700-800 rpm.
By reading the forum (see quote below) and and confirming with eennaam on ##avalon also, temp1 and temp3 return value, and temp2 is -1.
So i moved the modules, and it seems to be better at first look.
WARNING: use your own mind when considering doing the same.
before
[2013-03-18 12:37:02] Avalon: Fan1: 0/m, Fan2: 2280/m, Fan3: 2280/m Temp1: 22C, Temp2: -1C, Temp3: 45C, TempMAX: 46C
after
[2013-03-18 16:19:23] Avalon: Fan1: 0/m, Fan2: 2040/m, Fan3: 2040/m Temp1: 19C, Temp2: -1C, Temp3: 44C, TempMAX: 44C
temp3 should have non-zero value, according to this post, and user eennaam on IRC who confirmed as well.
Ioshia, what does your unit(s) return for temp1 and temp3?