LOL, That is awesome. By the way where are you? 50C?
The problem you are having is in your adc conversion code most likely. The LM35 outputs 10mV for each degree of Celsus. So your calculation would be:
(((Supply Voltage / (2^(sample bit resolution count)) * (adc result)) / 0.01)
First you need to calculate the voltage per bit.
Then convert the adc result to a voltage using the voltage per bit value.
And finally calculate the temperature from the voltage.
Be careful not to burn the LM35.
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Okay after looking at your code, I see that you are doing the correct conversion. However your adc setup is wrong. What is your crystals frequency?