Sunny,
Yes, those values in the dropdown are external id values. So, if I use the template {{Name}} ({{External_Id_Test__c}}) for both the Display Template and the Search Template, this is what I get:
Have you checked if you are able to view the external id field at all within the Skuid page? For example, if you show a list of Account records in a table with a column on the external id field, can you see the values there? Have you checked if your page viewers have access to the ext id field through Salesforce permissions settings?
