A B737-300 CREW HAD A 1000 FT ALT OVERSHOOT DSNDING INTO DEN.

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ON OUR ARR INTO DENVER; WE WERE CLRED TO FL190; THEN AFTER LEVELING WE WERE CLRED TO 14000 FT. THE CAPT WAS PF. HE CALLED FOR APCH DSCNT CHKLIST. PASSING THROUGH FL180; I STATED 'ALTIMETERS 29.64 SET.' THE CAPT RESPONDED; '64 SET.' WE CONTINUED OUR DSCNT; DISCUSSING THE NEED TO ADVISE FLT ATTENDANTS OF WX AND TURB CONDITIONS AND TO SIT DOWN NOW; AND TO STAY DOWN WITH A PREPARE FOR LNDG REMAIN SEATED ETC. I WENT THROUGH THAT OVER THE INTERPHONE. WHEN I HUNG UP WITH FLT ATTENDANTS; I TURNED AND SAW MY ALTIMETER WITH US LEVELED AT 13000 FT; THE ALT ALERTER AT '000' AND THE CAPT'S AT 14000 FT. THE CAPT HAD SET IN 30.64; THUS WITH THE 'A' AUTOPLT ENGAGED WE WERE 1000 FT LOW. I TOLD THE CAPT IMMEDIATELY OF THE ERROR AND HE CLICKED OFF THE AUTOPLT AND STARTED A CLB. I ADVISED ATC WE WERE 'CLBING BACK TO 14000 FT DUE TO AN ALTIMETER ERROR.' (BY NOW WE WERE AT 13400 FT AND CLBING.) ATC RESPONDED 'DSND NOW TO 11000 FT' AND DID NOT COMMENT ON OUR ALTDEV. (ON A SIDE NOTE; OUR TCASII BECAME INOP EARLIER IN THE LEG; WHICH ADDED TO MY CONCERN FOR TFC SEPARATION.)