1 I don't have to explain away the "intermediate state," I only say that there is one. I cannot really answer your question because it is a different cultural mindset. Since I have already presented my positions in the four points in the Original Post, I refer you back to it.
2 As I pointed out the Scripture for point #2, the light of God is perceived differently to both those justified by Christ and those who remain unjustified. God's presence to the unjust reveals their darkness of their hearts and due to their pride remain condemned eternally. To the Just of Christ, God's presence surrounds and permeates the very essense of the soul.
3 I not sure what to think about the "Confession of Diostheus." Upon research, it seems the confession is a refutation against some sort of Calvinist false confession of Cyril. Diostheus is, from what I gather, a patriarch of Jerusalem. Since the translation is in English and does not show the original language, and the confession is not a lengthy discourse, I simply feel this is not the best source. It does not come from an Ecumenical Council, it does not exegete the comments made. Wether or not "I agree" with it or not is a matter of speaking on my own ignorance regarding it. I tend to think you probably found this in an obscure place simply because it is easy to twist without relevant commentary by the Patriarches or other prominent Eastern Orthodox theologians. What I have read suggests that the light of God is like a fire. Eastern Orthodox do not see two types of fire, like a hell fire and a purgatory fire, but both are one fire because it is God's presence. Hence, I would disagree with your understanding of the "Confession of Diostheus" than I would directly against the confession itself. Again, you find me commentary by an Eastern Orthodox on the Confession, I can guarantee your "interpretation" of it is faulty. In fact, I give you Bishop Ware on the subject below. As you can see, there is room for various opinions in the Eastern Orthodox. I agree with the last statement regarding what is said to St. Antony.
http://orthodoxeurope.org/page/11/1/6.aspx
Orthodox are convinced that Christians here on earth have a duty to pray for the departed, and they are confident that the dead are helped by such prayers. But precisely in what way do our prayers help the dead? What exactly is the condition of souls in the period between death and the Resurrection of the Body at the Last Day? Here Orthodox teaching is not entirely clear, and has varied somewhat at different times. In the seventeenth century a number of Orthodox writers — most notably Peter of Moghila and Dositheus in his Confession — upheld the Roman Catholic doctrine of Purgatory, or something very close to it (According to the normal Roman teaching, souls in Purgatory undergo expiatory suffering, and so render ‘satisfaction’ or ‘atonement’ for their sins. It should be remarked, however, that even in the seventeenth century there were many Orthodox who rejected the Roman teaching on Purgatory. The statements on the departed in Moghila’s Orthodox Confession were carefully changed by Meletius Syrigos,
while in later life Dositheus specifically retracted what he had written on the subject in his Confession). Today most if not all Orthodox theologians reject the idea of Purgatory, at any rate in this form. The majority would be inclined to say that the faithful departed do not suffer at all. Another school holds that perhaps they suffer, but, if so, their suffering is of a purificatory but not an expiatory character; for when a man dies in the grace of God, then God freely forgives him all his sins and demands no expiatory penalties: Christ, the Lamb of God who takes away the sin of the world, is our only atonement and satisfaction. Yet a third group would prefer to leave the whole question entirely open: let us avoid detailed formulation about the life after death, they say, and preserve instead a reverent and agnostic reticence. When Saint Antony of Egypt was once worrying about divine providence, a voice came to him, saying: ‘Antony, attend to yourself; for these are the judgments of God, and it is not for you to know them’ (Apophthegmata (P.G. 65), Antony, 2).
Now if we can go back to the points in question of the OP...