I would connect the rheostat to a lamp and make sure it's working properly. I've seen some defective ones right out of the box. What are you using to measure temps? A temp gun is a fantastic tool for getting temps in any given surface area.
As for the half log, I would replace it with 2 identical hides that surround his entire body. You can use something as simple as plastic bowls with an entrance cut out. Sounds like you may want something more pleasing to the eye so just find something you like that makes a nice, tight place to hide. One of the warm side and one on the cool. Here's a link for glass tank setups. It's a bit long, but it's pretty good.
http://ball-pythons.net/forums/showthread.php?t=56846