I suspect you're getting interference from the transducer/hull contact area. The E29 will not be cored, but may excessively thick on the centerline.
Another test would be to remove the tranducer, reconnect it to the sounder and simply hold it on the water surface over the side. If you get a reading then, you'll know that it's your installation that's messing it up.
If you really want to avoid a proper through-hull installation, (and this tranducer may not be meant for that) then your options are a liquid well - epoxy a trimmed piece of plastic pipe vertically inside the hull, fill with a light oil or perhaps even water, and mount the transducer in that, or fabricate a bracket that hangs from the transom and keeps the transducer in the water.
This last is not an ideal solution, but you'll get the reading you need. For long term reliability and uncompromised performance, though, a standard through hull style of installation will work out best.
1984 Fast/Nicholson 345 "FastForward"
".. there is much you could do at sea with common sense.. and very little you could do without it.."
Capt G E Ericson (from "The Cruel Sea" by Nicholas Monsarrat)