MOSFET only turns partially off when overheated -- why?
We build high-temperature circuits, and find we have to test for this phenomena in an oven, although we generally work at higher voltages.  IDSS increases with temperature on all MOSFETS and will eventually reach a point where the leakage is enough to keep it hot or it runs away; that is, the heat generated by the leakage current (in your case .7 * 12 or 8 Watts) heats up the junction enough to sustain the large leakage or allow it to continue to increase.  Not an academic response, but maybe there is a solid-state physicist out there who can explain why this occurs.