So just an update for anyone who might come across this thread later.. I ended up flashing the ComputerFreek ROM suggested by ChazzMatt (didn't clean install, just wiped cache). It worked great, and so far I haven't had any more problems with apps...
Please post a SS or all the phone info page from settings.
As I want to see what turned out.
You are saying you successfully downgraded from the newest sw (step 1) & rooted (step 5).
This is newsworthy.
You cannot unlock on 98.16.3 the hole is...
I was getting an error specific to the dalvik-cache (/data/sdext2/dalvik-cache) claiming that it was read only. I used root explorer to try and change permissions for the folder, but root explorer was unable to (on a side note I WAS able to change...