Alex - thanks for the help. I tried shutting of the fan in S3D but when I print from an SD card, the cooling over-ride kicks in and turns the fan back on. No, I did not have the parts fan running when I ran the autotune PID test, just preheat mod. Funny thing happens, when I raise the extruder, with the fan on, the temp is maintained at 200. It's when the extruder is too close to the bed, that the fan force, bounces up and cools the heater block.
I also have a Robo 3D with an E3D hot-end, and it prints with no problem, but the heated bed may help. The fan shroud on the Robo is very different than the gMax. It's very simple, is farther away and does not wrap around the nozzle.
My next course of action, is to redesign the fan shroud to make it more similar to the one on the Robo. Also, a friend suggested, that I should replace my heater core with a more powerful 40w 12v core. The one I'm using, can't adjust to that fan. Also I might need to un-check all the cooling over-rides in S3D. They are not allowing me to turn down that fan speed.
What do you think? Is this a good course of action? I really appreciate your help.