The pilot reported that an aerotow to 2700 feet agl seemed to be accomplished quickly. When the glider had descended to 1400 feet the pilot rejoined the circuit but then considered that the altimeter was defective. She believed that sufficient height remained to permit a landing at the strip and carried out a low, tight circuit. However, as the turn onto final was completed an immediate landing flare was required. A heavy touchdown occurred and the aircraft came to rest 175 metres after the strip boundary. Faulty alignment of the "thousands" needle in the altimeter had led to the pilot mis-setting the height of the strip prior to take-off. The indications she read from the instrument were therefore 1000 feet in error.