It's a great write-up, I read the whole thing. You clearly understand the domain well.
I really just don't get why you'd, in one breath, decry XTS, and then in that same breath, recommend people use TrueCrypt, which is, as you call it, "the best-known implementation of XTS".
Maybe just lead me to the water on this one. It's really the only thing left unresolved in our conversation.