Ok, after some more experimentation, I've made some refinements as follows:
Folder Conditions for 'Dining Room'
Add conditions to limit when programs in this folder are allowed to run.
-----------Folder--------------
If
Status 'Dining Rm Lights (master)' >= 1%
Or Status 'Dining Rm Lights (rem. 1)' >= 1%
And-(
| Status 'Dining Rm Lights (master)' is not 100%
| Or Status 'Dining Rm Lights (rem. 1)' is not 100%
-)
Then
Allow the programs in this folder to run.
---------Program in Folder----------
If
Control 'Dining Rm Lights (master)' is switched On
Or Control 'Dining Rm Lights (rem. 1)' is switched On
And Status 'Dining Rm Lights (master)' is not 100%
And Status 'Dining Rm Lights (rem. 1)' is not 100%
Then
Set Scene 'Switch groups / (3-way) Dining Room Lights' Fast On
Else
- No Actions - (To add one, press 'Action')
-----------------
This seems to accomodate for the entire range of pre-set on-levels from 1-99%, but avoids the flicker I was getting when the program would run when lights were already at 100%.
I don't really know how to interpret the event viewer, but I think maybe what is happening is that with any single press "on" (regardless of current state of the switch) it is sending the command to the scene and any linked devices to go to the pre-set on-level, however the switch itself actually switches both its load and indicator LED to 100%. This is evidenced by how even with my program running, when lights are at 100% a subsequent tap "on" actually dims them to the pre-set on-level (70% in my case). This is what was causing the flicker at 100% as the switch would send the 70% on-level command and then my program would bring them back up to 100% again a moment later, hence the addition of the exclusions in the revised program to not run the program when at 100%. With the new program, a subsequent press (3rd tap) on still dims them back to 70% but at least they don't do the 70%-100% flicker. Of course it would be nicer if the lights just did nothing if the button was pressed while already at 100%, but it doesn't look like that is possible.
In any case, I think I've got things working well now.
I understand this issue may be the switches "working as designed" (I've got 20-some dimmers installed throughout the house and they all function the same way), but I'm not convinced this is "working as intended." I do still feel this is a bug that could benefit from being addressed in the future (if any Insteon engineers are listening). Logically, if all switches in a group are linked together as a virtual 3-way circuit, there should be no way for their statuses to get out of sync so easily in normal operation. Without the extra programming, a 2nd tap on of the load switch turns the lights up to 100% without changing the changing the status of the other switches in the group, while a 2nd tap of any of the other switches will change their status to 100% without actually turning the load up to 100%.