The new Windows Phone 7 clone market seems to show apps even if you can't install them, so sounds like that's what's going on but can't figure out why.
Waze, Facebook, Wifi Analyzer.. I think I saw another one too.
Solution is found, although still a tad quirky. You must have the new market and follow this procedure:
Ah hah! You are correct. Clearing market data at 161 caused me to lose my apps again. So it seems the full process is as follows: (and note I've never force closed the app, not sure why that should be necessary.
1) set dpi to 160 in build.prop
3) clear market app data (force close first may help?)
4) restart market, accept terms, let it rebuild data at 160 dpi
Posting my results, might help someone
Preface: NC running cm7 7.1.0 rc-1 on sandisk cl4 16gb card with 0.5 random write, 32 queue depth... See my post in the sd card performance topic
Downloaded and installed lcd density app
Choose 160 dpi
Choose reboot via first option, kill
After rebooting, run market
Notice its still broken
Goto running app/services
Kill 2 market services
Goto installed app list
Force quit market app
Full market front screen with movies, books, apps, etc
Was able to update 12 apps that didnt have update icons since i downloaded new market app.
I just did that, so i will post back if it has problems and or stops working in the future
Thanks to everyone that figured this stuff out, the two posts above are only examples which seem to work, there are other folks who started the ball rolling towards a solution.