I'm not an expert on the "towel dispute" subject.
But, regarding the palette question: The OA palette removed the duplicate colors in UA's palette, and then rearranged the others to make room for the color-cycling ranges. Of course, this means that if you just import a normal UA icon into OA the colors will get messed up. So, it's necessary to load an OA palette before importing.
In my artpack "hans-oa.zip" there are two versions of each combat icon in the set, one with a normal UA palette, and one with an OA palette.
In the OA palette, colors 229-254 are used for the color-cycling. When importing a new combat dungeon or wilderness, it's necessary to set these ranges color-cycling. (I'd have to look up exactly what those ranges are agian, tho.)