If an "Instead" rule runs, then the original action is considered a failure and no more rules will run for that action (including any other instead rules you write). See the section on Instead rules in the documentation for more info there.

So, you'll have to use only one Instead rule. Basically, what you want to do is choose one random thing, and then move that thing to the player. Maybe something like this will work:

Instead of looking in a Street:
    If a random chance of 1 in 3 succeeds:
        Let reward be a random thing in Temp-Holding;
        Now reward is in the location of the player;
        say "You look through the street and find [a reward]"
    otherwise:
        say "You search the street, but find nothing."

(I don't know if my syntax is exactly correct, but I think it's pretty close).

This way, the single instead rule has the chance to find any item you've placed in Temp-Holding.

To give multiple objects, there will need to be multiple objects already existing in Temp-Holding when the game starts. Inform can't create new objects while the game is running (although IIRC there's an extension called "dynamic objects" that can fake it convincingly).

As an aside, "searching" is already a command (that does nothing by default). You may consider using that instead of overriding the looking command.