Diagnosis
Trust your digital probe. The analog dial thermometer on the lid is notoriously inaccurate on many offset smokers, often reading 25-50°F lower than the actual grate temperature.
How to Fix It
Don't try to fix the lid thermometer—just ignore it for cooking. Get a good dual-channel digital probe thermometer. Place one probe at grate level, about an inch from the meat and away from the direct heat flow from the firebox. Use that reading to manage your fire. The second probe goes in your meat.
If That Didn't Work
If you're determined to have a working lid gauge, you can buy a higher-quality replacement (like a Tel-Tru) and install it in the same hole. You'll need to know the thread size, but it's a straightforward swap.
Heads Up
The lid temp is also measuring the hottest spot—the top of the chamber. Your cooking surface is cooler. That gradient is normal, but the inaccuracy of the stock gauge makes it useless for precise control.