Hi John,
Well, you're definitely moving in the right direction by setting the rear sag properly, as well as making sure that the clickers are set correctly too. Keep in mind that you should bleed the air off your forks while the bike is on a center stand with no weight on the wheels before each ride while the suspension is cool.
One thing to remember about clickers, they have a limited range. In other words, one cannot make up for incorrect internal valving, or incorrect spring rates with clickers alone.
As far as your front end twitch goes......... If the rear end sag was excessive it should have raked the front out some more as well as keeping weight on the back end, whcih in effect should have made the front end more stable. So, by you decreasing the amount of sag to the proper setting, this in effect will rake in the front and transfer weight to the front. And since you have reduced the amount of rebound damping in the rear this will in effect keep more weight on the front. The High Speed compression damping on the rear also plays a role in how the bike is balanced, the higher the High Speed compression damping the higher the bike will tend to ride in the travel. But don't worry about that right now, just set it to the standard setting.
There are two types of front end twitch, or rather two different things that can cause it. The first is a geometry twitch, that is what we have been talking about here, and the second is the suspension itself. The amount of stability of the front end is influenced by the rake, or steering head angle, and the amount of trail which is controlled by the offset of the triple clamps, and how far the front axle is set in front of the fork tubes, the more trail the more stable a bike is and visa versa. Trail is as follows: Draw a line from the center of the steering head to the ground. Then draw a verticle line through the center of the front axle to the ground. The distance between where these two points touch the ground is trail. Just for clarification, the vertical line drawn through the front axle is going to contact the ground behind where the line from the steering head hits the ground. There's a great article in last months Moto Cross Action magazine about all of this. As the suspension compresses in the front, the more weight is transferred to the front, and the steeper the front rake becomes in relationship to the ground. So, if your front springs are too soft, the front end will tend to ride too far down in the travel transferring too much weight to the front, decreasing the rake, and effectively making the bike unstable. This will also put you into the midstroke of the fork which is firming up as it hits this point. This inturn is going to make the front end skidish as the front will tend to deflect off of objects instead of absorbing them. Which brings us to the suspension part of the twitch problem. If the forks are too stiff valving wise, the front end will tend to deflect instead of absorbing the hit. You can solve some this by going to a softer setting on the compression clickers on the front end, however, if your springs are too soft you'll end up getting further into the travel of the front end, and the aforementioned side effects of this. That's why it's so crucial to have the proper spring rates at both ends so that the chassis is balanced.
Keep in mind too that the shock has a needle in it that goes into the top of the shock shaft when it reaches close to max. compression that effectively radically increases the compression damping. This is to help with bottoming. If the spring you are running is too soft, and you start to get into this area of damping the bike is not going to work very good at all. Now since you have set the static sag at 35mm, and it would appear that you will have the correct rider sag when geared up you should not have this problem. If in fact the rebound was too slow as you described, this would cause the rear end to Pack, which inturn would cause the bike to swap in the whoops, or successive hits. The only reason I'm harping on the spring rates is that my suspension tuner told me that stock rear spring should be on a 125, not an open four stroke, and I totally agree. And I personally feel that the stock fork springs are too soft as well.