Best hotend replacement

Over the last couple of years I have bought and sold several SD3's.  They are a great little printer given the proper modifications.  The very first thing I do is install an E3d all metal hot end.  It is by far the single greatest improvement you can make.  I just removed my very first E3d V4 from my first SD3 I ever bought.  It worked clog free the entire time even switching across filaments like nylon.  There is no way to dramatically improve a stock hot end because of how they are designed.  Your problems aren't from your thermistor reading 20 degrees from actual.  That is easy to compensate for as you know. 
Stop wasting your time and save a few bucks then go buy a high quality all metal hot end and never look back.
If you are serious about relocating your thermistor I am sure your idea would work.  I would make sure you have a spare thermistor at the ready though.  Those little wires are very fragile and will most likely break if you look at them the wrong way

+1,000 to E3D
When I did my upgrade a little over a year ago, I saved my stock hotend thinking "if this doesn't work out...", but the damn thing just collects dust now and I can honestly say upgrading to an all metal hotend like E3D is arguably the best upgrade one can do.

If you have the cash, do yourself a favor and pick one up at filastruder.com and don't think...just do it. And like wardjr said, save up if you have to.

I guess I must be one of the minority users that is actually happy with the standard hot end.  Actually the MG Plus style hot end that comes with the Solidoodle is a pretty good design. 

The only problem with the Solidoodle version is the heat block they use. 

It's poorly made, smaller than what it should be, the heather cartridge hole is too large, it has no hole for the thermistor, and no tapped holes for set screws.  To make things worse, the tapped hole the heater tube taps into isn't even perpendicular to the block, which prevents the nozzle from sitting flush on the face of the block.  Since there's no hole for the thermistor, they attach the thermistor to the side of the nozzle with Kapton tape.

So from my point of view, short of replacing the entire hot end with a E3D or J-Head or whatever, you can make a couple of inexpensive mods to the exiting one and I think it might help you change your mind about it.

1.  Get a replacement heater block.  I got a couple of them for about $5 on eBay and replaced the Soliddole with it.  You won't need to use fiberglass insulation or wrap the hot end in Kapton.
2.  Buy a heater cartridge and get rid of the resistor.  It's a lot faster heating up and more reliable.
3.  You can reuse original thermistor, so you won't need to make any changes to the firmware.

I only wrapped the wiring together so the heater bundle holds the thermistor inside the cartridge.  I bought the heater block from here:

http://www.ebay.com/itm/2-x-Aluminium-H … 5b0c2029d4

maybe ya have to use one of those 3D printed plastic Crescent wrenches lol

The problem with the SD  hot end is that he heater barrel they used doesn't have a HEX middle section where you can use a wrench on it, it's threaded all they way, so I had to just clamp a vise-grip on it between the peek and the heat block, then unscrew the peek and the heat block off that way.

At the time I had it all apart, I could have replaced the barrel with a proper one (they go for about $9 on eBay), but since the heater block, and the peek screw in from opposite end, and never go through the area where the threads got distorted by the vice-grips, I never did.  besides, the threads didn't get too trashed.

As far as the non-metal compound you speak of, I don't know what you're referring to. If you're thinking of the cement that holds the heating resistor in place, well, that went a way a long time ago when I replaced the resistor with the cartridge.

I just leave the PEEK on the threaded part and grab the peek with grip pliers to get the nozzle off, then chase through the cold end with a drill bit.

Maybe the hotend on your machine was different but I disassembled mine without murking the threads by following IanJohnson's video. It was step-by-step accurate for me and involved no thread mashing:

I ended up not being able to use the hotend anyway because I broke the thermistor on reassembly. They're cheap but I already had my e3d v6 on hand...

so the 'peek' is the plaster heater? if its destroyed how can you still use it?